FX Breakout Monitor: SEK and gold making waves as majors dither FX Breakout Monitor: SEK and gold making waves as majors dither FX Breakout Monitor: SEK and gold making waves as majors dither

FX Breakout Monitor: SEK and gold making waves as majors dither

Forex 5 minutes to read
John Hardy

Head of FX Strategy

Summary:  A weak CPI print has the Swedish krona breaking down all over while the major currencies continue to dither within tight ranges. And gold has broken free again to the upside over the last couple of sessions

For a PDF copy of this edition, click here.

It appears FX traders are awaiting important catalysts like the outcome of US-China trade negotiations and Brexit and perhaps the next rounds of macroeconomic data that will prompt greater anticipation of coming policy moves from the major central banks. Today, the currency most pointedly on the move was the Swedish krona, as the currency fell to new local lows across the board on a weak CPI print. We’ll watch whether this move holds into today’s close for a possible sell-off of the krona versus the USD or EUR tomorrow morning. Gold is on the bid as well even as silver is left back in the range.

Breakout signal tracker

Our AUDCAD barely avoided a stop-out yesterday and rolled conveniently back lower as we take it off for less than half of the distance to the original stop. The EURUSD short is going nowhere now several days after we entered the position near current levels. We will consider SEK shorts tomorrow depending on the quality of the market close today in EURSEK and USDSEK.
Source: Saxo Bank
Today’s FX Breakout monitor

Page 1: Prospects seem moribund for the immediate term in most FX pairs – still awaiting whether EURUSD makes a more concerted effort lower after the recent break signal.
Source: Saxo Bank
Page 2: Gold continues to poke to new highs for the cycle, though without much impulsivity – still it is making a statement relative to the deadbeat majors here – see more below. The other prominent mover is SEK, with prominent new lows today in reaction to the weak Swedish CPI data. And all quiet on the CNY front allows USDTHB to look at a new low as well – while USDZAR looks the other way as South Africa credit spreads have recently pulled back wider.
Source: Saxo Bank

The Swedish krona was in for a drubbing today on a weak CPI release that took the currency to new lows across the board. Note that the horizontal line near 9.40 here is the highest daily close back in late 2016 (and before that since 2002). Important to watch whether the move holds into today’s close for a sense of whether the krona is in for a new bout of trending weaker. 
Source: Saxo Bank

Impressive that gold continues to make a statement by poking to new highs for the cycle, but less than impressive that it is doing so with an Average True Range close to the very lowest registered over the last several years. The most prominent chart points higher are the range highs from $1,366/oz up to $1,375/oz, the highest levels since 2014.
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.

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.