Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Trader Strategy
Access both platforms from your single Saxo account.
FX Breakout Monitor: USD firm after mixed US jobs report
John J. Hardy
Global Head of Trader Strategy
Summary: An interesting setup ahead of next week as the USD stays firm near interesting breakout levels into the end of the week after a mixed US jobs report. Sterling also possibly poised for a break if it becomes clear next week that a long further Brexit decision delay awaits.
For a PDF copy of this edition, click here.
The US jobs report didn’t provide any unambiguous signals. On the positive side was the strong bounce-back in payrolls in March (+196k and a +14k revision of prior two months versus expectations of circa +175k) from the very weak February drop-out print of +20k. But a very weak +0.1% month-on-month rise in average hourly earnings has inflation watchers yawning and the participation rate dropping back -0.2% spoils the interesting bounce in that measure in February. All in all, the report keeps the Fed very “patient” and benign, while not showing the kind of weakness that points to a growth slowdown.
Today’s FX Breakout monitor
Page 1: We’re still close to that EURUSD perma-range downside breakout level – seeing is believing there. Elsewhere we note the NZDUSD and GBPUSD pairs for possible significant breaks if USD strength prevails, the former charted below.
Page 1: We’re still close to that EURUSD perma-range downside breakout level – seeing is believing there. Elsewhere we note the NZDUSD and GBPUSD pairs for possible significant breaks if USD strength prevails, the former charted below.
Page 2: AUDJPY worth a look next week if it can clear the bigger 49-day high (given the long established range) and also worth noting the jarring contrast of USDZAR looking lower while some USD/Asia EM is testing topside resistance, including USDTHB.
Gold and silver still suffering near breakout levels as yields rise (although as of this writing they have pushed back lower after two-way post-US jobs report action) and risk appetite is strong, but haven’t quite punched through to the downside – also worth watching early next week.
Gold and silver still suffering near breakout levels as yields rise (although as of this writing they have pushed back lower after two-way post-US jobs report action) and risk appetite is strong, but haven’t quite punched through to the downside – also worth watching early next week.
Chart: NZDUSD
An almost too-well defined range in NZDUSD as we await a USD direction. Will we get any notable USD/Asia or USD/Antipodean action until we see the US-China trade deal announcement, possibly not for many more weeks? In any case, early next week, we will keep an eye on the 200-day moving average and range low here in NZDUSD and note that much of it is being driven by NZD weakness more than USD strength locally – as we noted earlier today, the kiwi now has turned the corner to the downside versus the AUD after the extension of AUDNZD above 1.0500.
An almost too-well defined range in NZDUSD as we await a USD direction. Will we get any notable USD/Asia or USD/Antipodean action until we see the US-China trade deal announcement, possibly not for many more weeks? In any case, early next week, we will keep an eye on the 200-day moving average and range low here in NZDUSD and note that much of it is being driven by NZD weakness more than USD strength locally – as we noted earlier today, the kiwi now has turned the corner to the downside versus the AUD after the extension of AUDNZD above 1.0500.
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.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX outlook: Tariffs drive USD strength, until...?
John J. Hardy
Global Head of Trader Strategy
-
Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
Disclaimer
The Saxo Bank 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. This content is not intended to and does not change or expand on the execution-only service. 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank 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-gb/legal/disclaimer/saxo-disclaimer)