FX Breakout Monitor: August 31, 2020 FX Breakout Monitor: August 31, 2020 FX Breakout Monitor: August 31, 2020

FX Breakout Monitor: August 31, 2020

Forex 4 minutes to read
John Hardy

Head of FX Strategy

Summary:  Las week ended with a rash of breakouts across FX as the US dollar weakened and the Japanese yen has gyrated wildly in both directions on the announcement that Prime Minister Abe is set to resign. But the clearest signals were most concentrated in the USD pairs we track as we look ahead at a busy calendar this week.

Today’s New Breakout Signals

Today, we have so many new signals – new 19-day highs or low closes for a given FX pair – that we merely highlight a couple of breakouts of interest and leave the full list for farther down in this post. The high number of signals is mostly down to a significant move lower in the US dollar to a new low for the cycle after a bit of rangebound behaviour in places last week, but there are other breakouts afoot as well.

Breakouts and auto trade setups
Auto trade setups are taken on the principle that a “new” breakout signal is the first signal in five days and a stop is established at 1.05 average-true-range from that closing level.

SIGNAL: GBPUSD closes at new 19-day high

Example auto-trade setup: buy on breakout close at 1.3353, stop at 1.3230, target: hold for new high in days 7-9 (Sep 8-10)

GBPUSD broke to a new cycle high and has only traded above current levels for very brief episodes stretching all the way back to early 2018.

Source: Bloomberg and Saxo Group

Signal: NZDUSD closes at new 19-day high

Example auto-trade setup: Buy near Friday breakout close at 0.6743, stop at 0.6673, target: hold for new high in days 7-9 (Sep 8-10)

The setup here is similar to many USD pairs, though AUDUSD was a bit ahead of NZDUSD in breaking higher – interesting to note here, as with GBPUSD; that NZDUSD is looking at levels that have proven the highs for quite some time – stretching well back into 2019 in the case of NZDUSD.

Source: Saxo Group

Breakouts on the radar

As can be seen in the table below, we have a few possible new breakouts on the radar today – chief among them EURUSD, which as of this writing was trading above its 19-day high closing level and USDCHF which has a similar setup (new low close). Elsewhere, NOK features prominently with a major new cycle low if the break lower holds, and similarly NOKSEK if the price level holds above the prior high. For trading setups, traders can taking the closing price today if it is above/below the price break and employ a stop of, for example as we use in our automatic setups, 1.05 ATR, with the latest ATR shown for each currency pair.

While many USD pairs have broken higher, the main one – the big EURUSD – has so far failed to stick a new high close since a failed breakout on August 18. A close above 1.1931 today would be the highest for the cycle.

Source: Saxo Group

Note that EURNOK has powered to a new 19-day low close and indeed, is mulling the lowest closing level since before the oil price crash that unfolded during the COVID-19 panic phase and crashed NOK with it.The 2019 high was just above 10.31 and the round 10.00 level was a constant resistance point before that stretching back to late 2018.

Source: Saxo Group

Table: FX Breakout Monitor

Source: Saxo Group and Bloomberg

Table: Most recent new breakout signals for each currency pair.

Source: Saxo Group and Bloomberg


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.

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

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.