Summary: The USD rally attempt from last week has yet to find new sustenance and fresh dollar longs are at risk of a reversal if follow-through strength is not found. Elsewhere, sterling traders faced whiplash today while the JPY remains in focus this week for potential breakout strength.
The big break attempt lower in EURUSD last Thursday over the European Central Bank meeting has yet to find fresh fuel after a mixed US jobs report failed to see follow on broad USD strength on Friday and to start this week. This leaves the breakout monitor more bereft of new signals than it has been in a long time. Still, we have a look at potential JPY strength via AUDJPY, USDJPY and EURJPY soon if the recent firming of the yen turns more pronounced.
Breakout signal tracker
Our recent EURUSD and AUDUSD shorts are at risk of stopping out soon if the USD doesn’t follow through on last week’s firming move. The US dollar has simply been unable to sustain directional moves in either direction against the major currencies after range breaking attempts this year.
Today’s FX Breakout monitor
Page 1: after last Thursday’s EURUSD break, we have yet to see follow-through lower. Elsewhere, the focus is on especially EURJPY and possibly AUDJPY as breakout candidates. Interesting to note AUDCAD trying to break higher on a day when AUDNZD is registering yet another new low.
Page 2: EURNOK offered a dose of whiplash as last Friday’s new high close (an ugly one, given the shooting star candlestick to close the day) was rejected strongly today on a strong Norway CPI. Elsewhere on Page 2, we see little fresh directional interest.
We added EURJPY to our watchlist on Friday and the pair narrowly missed a new 19-day close. Nominally, the 19-day low close is less interesting than a close clear of the 124.00 which has supported the price action since the brief meltdown at the beginning of the year.
REFERENCE: FX Breakout Monitor overview explanations
The following is a left-to-right, column by column explanation of the FX Breakout Monitor tables. Trend: a measure of whether the currency pair is trending up, down or sideways based on an algorithm that looks for persistent directional price action. A currency can register a breakout before it looks like it is trending if markets are choppy. ATR: Average True Range or the average daily trading range. Our calculation of this indicator uses a 50-day exponential moving average to smooth development. The shading indicates whether, relative to the prior 1,000 trading days, the current ATR is exceptionally high (deep orange), somewhat elevated (lighter orange), normal (no shading), quiet (light blue) or exceptionally quiet (deeper blue). High Closes / Low Closes: These columns show the highest and lowest prior 19- and 49-day daily closing levels. Breakouts: The right-most several columns columns indicate whether a breakout to the upside or downside has unfolded today (coloured “X”) or on any of the previous six trading days. This graphic indication offers an easy way to see whether the breakout is the first in a series or is a continuation from a prior break. For the “Today” columns for 19-day and 49-day breakouts, if there is no break, the distance from the current “Quote” to the break level is shown in ATR, and coloured yellow if getting close to registering a breakout.
NOTE: although the Today column may show a breakout in action, the daily close is the key level that is the final arbiter on whether the breakout is registered for subsequent days.
With oil at $150, Saudis buy Champions League franchise
Emboldened by surging crude oil prices, Saudi Arabia makes waves on the international stage, as Crown Prince Mohammed bin Salman manages to create a World Champions League, after buying the UEFA Champion League franchise.
World hit by major health crisis as obesity drugs make people stop exercising
As the world embraces GLP-1 obesity wonder drugs, the people next in line to get a prescription stop caring about dieting and exercising, figuring that the drug will later solve all of their weight-related health problems.
With the US budget deficit spiraling above 10% of the GDP, the government is desperate to foster demand for US Treasuries. Under intense pressure from the White House, Congress makes income from government bonds tax-free.
Generative AI deepfake triggers a national security crisis
After a criminal group deploys the most deceptive AI deepfake ever seen, generative AI becomes a national security threat. With public distrust soaring, governments crack down with harsh new laws, puncturing the AI hype.
Deficit countries form ‘Rome Club’ to negotiate trade terms
To fix the divergence in the global trade and financial system, the largest deficit countries unite to negotiate new world trade terms. For surplus countries, the reset of the global economic model is a painful adjustment.
Robert F. Kennedy Jr wins the 2024 US presidential election
As discontent with Biden and Trump rises to fever pitch, Robert F. Kennedy Jr sees his support rising inexorably in the polls. On November 5, Kennedy wins the US presidential election, ushering in a new era in US politics.
Japan’s ‘lucky 7%’ GDP growth rate forces BoJ to abandon yield curve control
Stepping up Japan's economic transformation in 2024, PM Kishida brings in a host of populist policies to boost domestic demand. As the GDP growth rate hits 7%, the BoJ is forced to abandons its yield curve control policy.
Luxury demand plunges as EU goes Robin Hood, introducing wealth tax
As people wake up to how little tax Europe’s billionaires are actually paying, the EU Commission implements a wealth tax of 2%. The tax sends shockwaves through Europe's luxury industry, with luxury giant LVMH plunging 40%.
None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.
Your browser cannot display this website correctly.
Our website is optimised to be browsed by a system running iOS 9.X and on desktop IE 10 or newer. If you are using an older system or browser, the website may look strange. To improve your experience on our site, please update your browser or system.