CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.
Cookie policy
Our websites use cookies to offer you a better browsing experience by enabling, optimising, and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy and our privacy policy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.
Summary: We got very soft US payrolls and earnings data today that weakened the USD in a knee-jerk reaction. If the move holds into early next week, momentum traders will look to trade weak USD breakouts.
Click here for the full FX Breakout Monitor report.
The payrolls numbers from the US were weak. The US May nonfarm payrolls Change was only +75k versus +175k expected, and the two-month revision was -75k, so effectively we have zero payrolls growth from where we thought we were at the end of April. Given good jobless claims numbers of late and a strong ISM Non-manufacturing employment component, this came as a surprise, but this figure can be erratic from month to month.
Average hourly earnings rose a disappointing 0.2% month-on-month and only 3.1% year-on-year, the weakest since last September.
The US dollar sold off in response and we watch today’s close with extra interest as we could see a more notable break in a number of USD pairs – especially EURUSD at the 1.1300 area we have been tracking lately.
Breakout signal tracker
End-of-day Friday is not a time for adding signals to the tracker – we’ll have a fresh look early next week.
Note: we wrote correctly that the EURJPY short signal was stopped out at breakeven, but indicated this incorrectly in the table below – this has now been rectified.
Source: Saxo Bank
Today’s FX Breakout monitor
Page 1: the 1.1300 area is the important break level in EURUSD, which captures the medium term 49-day high as well. No hold of that level into the weekly close, then no breakout, and, well... stay tuned. Elsewhere, EURGBP is on an odd sprint higher late today – the latest break higher has failed to yield further gains this week. We discuss the aggressive USDCAD move below.
Source: Saxo Bank
Page 2: precious metals jumped to attention again on the weak US growth. USDZAR extended higher on concerns that the SARB may lose its independence and print money to bail out state-owned company debt, like that of the debt- and scandal-plagued Eskom. USDMXN remains nervous at the top end of the range as US-Mexico talks are set to resume to resolve the border crisis in the US.
Source: Saxo Bank
Chart: USDCAD
The contrast of weak US employment data and another strong Canadian survey has USDCAD looking at new 49-day lows today as well as the 200-day moving average. That latter level seems a bit arbitrary and the next big level is 1.3100 from here, a level that may only come under pressure if the market continues to celebrate weak data as a sign that the Fed will bring back the punchbowl (i.e. strong risk sentiment). Next major test for all USD pairs will be the June 19 FOMC meeting.
Source: Saxo Bank
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.
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.
Your browser cannot display this website correctly.
Our website is optimised to be browsed by a system running iOS 9.X and on desktop IE 10 or newer. If you are using an older system or browser, the website may look strange. To improve your experience on our site, please update your browser or system.