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.


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/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

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. Android is a trademark of Google Inc.

©   since 1992