FX Breakout Monitor: EURUSD breakout suffers rejection FX Breakout Monitor: EURUSD breakout suffers rejection FX Breakout Monitor: EURUSD breakout suffers rejection

FX Breakout Monitor: EURUSD breakout suffers rejection

Forex 5 minutes to read
John Hardy

Head of FX Strategy

Summary:  The USD rally has suffered an all out tactical rejection in places today, led by EURUSD as German CPI and Eurozone growth data surprise to the upside.

For a PDF copy of this edition, click here.

Another day brings another change of tone, and in fact today saw two different phases – some risk-off overnight on weak Chinese PMI surveys and Google results late yesterday, followed by a stronger Eurozone and Italian GDP estimates for Q1 and massive surprises on German CPI for April powering a euro comeback across the board. EURUSD looks fully reversed from the downside breakout attempt if it closes the week above 1.1200, although strictly speaking 1.1250 offers better confirmation of a reversal.

Today we merely make a couple of observations on the latest moves as we are reluctant to take on new positions ahead of tomorrow evening’s Federal Open Market Committee meeting  (though we may add a EURAUD position tomorrow on a strong close today – see below.)

Breakout signal tracker

The EURUSD short was stopped out on today’s steep back-up and we feel less bad about our “poor” entry level for the position, as even had we waited for a better entry, the stop level would not have been far above 1.1200 anyway. The EURSEK long still in working order, and we raise the stop level there as it would be disappointing after yesterday’s new high close for the cycle to see the price action back below 10.60 – the time frame for the trade runs out Friday if the stop survives. The USDCAD long is still alive after a weak GDP print from Canada today.
Source: Saxo Bank
Today’s FX Breakout monitor

Page 1: the most notable developments don’t show up on a breakout monitor, namely, today’s reversal in the USD rally in spots – particularly in EURUSD and GBPUSD. Note that both EURAUD and GBPAUD are looking at new 19-day high closes today, as is GBPCAD and (almost) EURCAD. EURCHF is very close to an upside breakout.
Source: Saxo Bank
Page 2: here we note the GBPCHF rally on the day – looks convincing if it can hold a strong close (see chart below) and the market has a generally risk-positive take post-FOMC and the Bank of England fails to dent the sterling’s resurgence here. Elsewhere, we note XAGUSD looking at the low closing level for the cycle.
Source: Saxo Bank

EURAUD encapsulates the shift in the news today, as China’s weak PMIs worked against the Aussie’s favour while positive data surprises in Europe have boosted the euro. The currency market likely poorly positioned for positive fundamental news out of Europe as the euro has been used for funding carry trades. Note the 200-day moving average in play.
Source: Saxo Bank

GBPCHF with a banner day as CHF competed with USD and AUD in the race to the bottom today . A strong  close near current levels looks  convincing for a test of the top at 1.34 and perhaps beyond if the Bank of England doesn’t throw up any obstacles or especially if it surprises on the hawkish side.
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.  

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.


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, 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. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such 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.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.