FX Breakout Monitor: EM and gold moving the most

Forex 4 minutes to read

John Hardy

Head of FX Strategy

Summary:  The yen has picked back up its safe haven status after a pronounced bout of weakness last week, a rather whiplash-inducing development, while G10 FX moves remain muted relative to the gyrations in risk sentiment. EM currencies are a different story, with the ruble in bad shape as oil markets came unglued again today on top of the weak risk sentiment.


Today’s Breakout monitor

The FX Breakout Monitor is a concise PDF overview of all current and recent price breakouts for the short and medium term for major FX pairs and spot silver and gold.

A PDF of today’s Breakout Monitor

Below is a snapshot of the full list of currency pairs we track for the breakout monitor. It is amazing to note the “sea of blue” in the ATR heatmap for the currency pairs in the G10 universe, with EURNOK the first pair to register an elevated “light orange” high ATR reading – no surprise to see gold as the only other instrument showing up as elevated on the ATR heatmap. Notice the EM weakness evident at the bottom of the table, as well as another EURCHF break lower (if it closes below 1.0610 today).

Source: Bloomberg and Saxo Group

The gold move extended aggressively today, but one of the biggest moves relative to recent volatility was in the ruble, as we look at below. And we continue to watch USDJPY for signs of a full reversal back lower as last week’s breakout hasn’t let to follow through higher and has seen deep backfilling amidst a backdrop of weak risk sentiment and strong safe haven bonds.

Today’s Breakout Highlight: USDRUB
Besides gold, the largest mover on the day in relative volatility terms was the Russian ruble in our universe, as the ruble exploded above 64.00 as it more firmly took out the 200-day moving average and likely on the pronounced further weakness in crude oil prices on top of the weak risk sentiment to start the week. As well, it is worth noting that the crude oil forward curve remains below the current spot price out into 2022, so the market is expecting weak demand to stretch a way over the horizon for now. The ruble was a popular carry trade until earlier this year so there may be plenty more downside risk from a positioning angle if oil prices continue lower from here.

Source: Saxo Group
Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer)

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.

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.