FX Analysis – Risk-off sees Gold soar to all time highs, Yen outperforms after hot CPI

Risk off returned to the markets in Tuesdays session with US equity markets pulling back sharply led by tech stocks with the NASDAQ being the biggest loser, shedding 1.65%.

The big headline for the day in FX was gold touching on all-time highs, rallying for a fifth straight session, buoyed by haven flows and a drop in US treasury yields. XAUUSD RSI reading in extreme overbought territory at over 78, the highest level since the blow off top in March 2022.

JPY was the G10 outperformer with USDJPY pushing briefly below the key 150 level after a hotter the expected Tokyo inflation print. Yen was also helped by more jawboning out of currency diplomat Kanda who said that markets must brace for higher interest rates environment.

AUD and NZD saw marginal losses against the greenback, with AUD modestly outperforming the Kiwi. In the APAC session both currencies were softer amid disappointment out of China which weighed on sentiment before recovering somewhat in the US session. AUDUSD briefly dropped below 0.65 and hit a low of 0.6478 before finding support to head into the APAC session above 0.65. NZDUSD pushing below last week’s RBNZ-led low and 200DMA at 0.6076 to make a low at 0.6072 before recovering to trade above the key support at 0.61.