For a PDF copy of this edition, click here. The greenback continues to show resilience and is eyeing a breakout versus the EUR today, though we argue that the break must sustain post-ECB on Thursday for further downside prospects. Tonight, we get confirmation or rejection on the recent AUDNZD break over NZ Q4 CPI.
Weak risk appetite spilling over from Asian and into the European and early US trading sessions sees the JPY rather sharply stronger again, though we need the prior late JPY cross flash crash spike to fade out of view or strong new momentum to trigger new JPY upside breaks (downside JPY cross breaks). Our favourite eventual candidates for JPY strength expression are AUDJPY and EURJPY.
For now, our chief focus is on the USD outlook as additional USD pairs are eyeing fresh 19-day highs, including EURUSD and USDSEK today, though we argue that a broader USD upside break view needs to see EURUSD downside through 1.1300 on the other side of the ECB meeting on Thursday.
Today’s FX Breakout monitor Page 1: EURUSD has probed beyond the 19-day low close at 1.1344 today, but we have argued recently that the key level is 1.1300 and post-ECB price action. Elsehwere, GBP has rejoined the rally path, but the move is hampered a bit today by generally weak risk appetite (which tend to favour USD and JPY).
Still, GBPAUD is eyeing a new 19-day high close on the day and EURGBP is a candidate for more downside on a dovish ECB meeting and further hopes that we are headed for no Brexit or a soft Brexit. The AUDNZD situation needs resolution either way tonight over the New Zealand Q4 CPI report after the recent attempt to break above the 1.0620 area.
