FX Breakout Monitor: USD slipping to new lows FX Breakout Monitor: USD slipping to new lows FX Breakout Monitor: USD slipping to new lows

FX Breakout Monitor: USD slipping to new lows

Forex 3 minutes to read
John Hardy

Head of FX Strategy

Summary:  Strong risk appetite is driving strong performance for smaller currencies and sterling, at least in part fed by hopes for a smooth Brexit and as the Fed is seen as onside in providing needed liquidity at every turn from here, helping the USD lower.

The FX Breakout Monitor is back, and it is expanded with "autosignals" that show examples of how to trade new breakouts, defined as new 19-day high or low closes not preceded by a breakout in the same direction in the prior week. Click on the link below for a look at the full PDF of the table overview and the Recent New Breakouts tables. See further below for a couple of chart highlights related to today's monitor.

Today’s Breakout monitor

We are largely seeing extensions of recent themes in the latest market action – especially in sterling trades continue to power through to the strong side despite this weekend’s indecisive outcome for Johnson’s Brexit deal and the uncertainty on whether we will see a vote on the deal this week (even this evening) or not until after a delay to January has been agreed with possible elections in the interim.

Elsewhere, the USD continues to extend the lower outside of USDJPY, with “new” breaks (the first in at least a week) below the 19-day low close on Friday’s close in USDSEK, USDCHF and USDRUB adding to the three breaks lower for the USD recorded on Friday (against NZD, AUD and THB).

Note in the auto-signals list that the weak performance (stop-outs) of the recent sterling upside breaks is due to the “automatic” setup for the signals – the big break higher in sterling on Friday the 11th saw a big back-fill day on the subsequent Monday that extended more than 1.05 ATR (the default distance to the stop). Normally a trader would not enter “at close” on a given day, especially a Friday, but look to work an order on the following day and adjust the distance to the stop relative to recent volatility (thus also decreasing the size of the overall position to keep the risk per trade as a constant) so in reality the break has performed quite well to date on a reasonable entry long GBP on Monday the 14th in many pairs, using a wide-ish stop, that traders would now have moved significantly higher. (Standard holding period is 9 days)

Today’s Breakout Highlight: USDSEK
The Swedish krona has firmed up well over the last few sessions, in part driven by last week’s revelation that the Swedish statistics agency responsible for reporting unemployment data has reported that the data may be underestimating the strength of the Swedish jobs market, a factor that could ease any sense of panic from the Riksbank this week. The SEK has indirectly also been riding the coattails of a stronger sterling, as hopes for a smooth Brexit bring relief to the outlook for EU- and Swedish exports. The latest price action here is beginning has provided a fairly profound rejection of the recent new highs above 9.90, but a full trend reversal needs to see the destruction of the rising channel-like formation and push well south of 9.50. In addition, there is a bit of a pivot area around 9.60 that needs to be taken out for a more profound break.

Source: Saxo Group

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.