FX Breakout Monitor: AUD tries to get something going FX Breakout Monitor: AUD tries to get something going FX Breakout Monitor: AUD tries to get something going

FX Breakout Monitor: AUD tries to get something going

Forex 3 minutes to read
John Hardy

Head of FX Strategy

Summary:  Sterling droops on dovish dissenters at the BoE today, but the breakout picture not yet compelling. Elsewhere, the reaction to the purported US-China trade negotiation breakthrough was rather modest and shows weak transmission into currencies. Still, the AUD and JPY have reacted as one would expect and EURAUD is a standout pair in recent weeks.


The link below takes you to the latest FX Breakout Monitor, a concise PDF overview of all current and recent price breakouts for the short and medium term for major FX pairs and spot silver and gold.

Today's FX Breakout Monitor

The hoped for US-China trade-deal is getting priced more like a done deal at this point, as bonds swooned and US equity futures ripped to new historic highs in the wake of this morning’s announcement from Chinese official sources that the US and China have agreed to lift. The reaction in currencies markets was clear if rather constrained – the JPY was sharply weaker and the USD was initially weaker but firmed later.

So as we watch the follow-on reaction to this latest round of trade-related “news” unfold, it is interesting to note the divergent trajectories of two USD pairs: AUDUSD (still close to the upside breakout level after never achieving a follow-on rally after the breaks higher from last week) and USDJPY, which is still mulling an upside break for the greenback as US yields poke on new highs for the cycle here. Continued trade-deal hopes, risk sentiment melt-up and rising yields could see the USD moving in different directions in these crosses. Avoiding the USD, AUD also looks interesting versus the Euro, as EURAUD saw a successful break lower last week that is trying to follow through lower here below the 49-day low as well (see chart).

Elsewhere, momentum traders may have generally low conviction after such a high percentage of recent signals have failed, but the breakdown in EURSEK over the last couple of sessions – now extending to a 49-day low intraday today, looks interesting as well.

Today’s Breakout Highlight: EURAUD
AUD strength has been prominent in recent sessions and US-China trade headlines looks supportive here for further AUD resilience. EURAUD has taken a distinct turn for the worse in recent sessions and broke lower already last week locally, with a larger break of the 49-day low close quite clearly etched on the chart as well, should the smaller currencies continue to perform well against the euro here on ongoing optimism.

Source: Saxo Group
Disclaimer

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
Australia

Contact Saxo

Select region

Australia
Australia

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.