FX Breakout Monitor: USD losing momentum, GBP trying to gear up

Aside from the ongoing interest in whether this USD attempt to the upside will blossom, we note that the risk-off move from the corona virus outbreak in China has seen little feed-through into FX, although interesting to note the weak precious metals today, especially silver, which is threatening a new 19-day low as copper prices came strongly under pressure overnight (silver is a dual use metal, thus often a tug of war between its association with gold and sometimes divergent developments in copper, with copper mining and silver mining often coming from the same ore sources).

As well, and as we highlight below in GBPJPY, sterling is enjoying a strong bid today on the back of a very strong employment growth number from November and thoughts that the BoE may just hold off from cutting rates next Thursday.

Today’s Breakout Highlight: GBPJPY
GBPJPY is trading not far from the 19-day high close just above 144.00, also the highest daily close for the year, as the strong UK payrolls data today boosted the currency amid hopes on the bulls’ part that the Bank of England may consider holding off on cutting rates next week to see if the UK economy can post a comeback. Note that EURGBP downside breaks aren’t particularly far away either. The originally bearish-looking pump-and-dump over the UK election in December looks less bearish now in the wake of a lack of follow through lower and fairly steady price action in the ensuing several weeks. Still - seeing is believing in this environment of compressed volatility.