NY Open: Twenty pounds of headlines
Markets started the day in a confusion of incoming news as ECB chatter met with trade talk updates and US macro data. EURUSD took it on the chin and dropped from 1.1270 to 1.1235.
Head of FX Strategy
Summary: The Friday USD surge has partially faded as traders are perhaps unwilling to commit to fresh longs ahead of the FOMC meeting this Wednesday. Elsewhere, a fairly typical Monday, though NOK is looking at new major lows today versus the euro.
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The USD breakout situation was muddied already late Friday as the greenback didn’t stick the close higher versus the EUR, though it did manage a break on market close elsewhere against the G10’s weakest links, including AUD and NOK. A recent break higher in USDCAD has been brewing for a week, but has yet to follow through or find rejection.
As we noted in Friday’s post “The tricky caveat for USD breaks right here is that action may get bottle up ahead of the FOMC event risk next Wednesday and the risk that the FOMC waxes more dovish than expected (though a fairly dovish shift looks in the price).”
Today’s FX Breakout monitor
Page 1: Note that USDCAD remains perched at breakout levels – probably awaiting the Federal Open Market Committee outcome for whether to challenge higher to 1.3800 or have this latest breakout attempt rejected by a more dovish than expected Fed. Otherwise, there are no new breakouts save for the AUDUSD break lower triggered on the Friday close.