FX Breakout Monitor: JPY stealing the spotlight FX Breakout Monitor: JPY stealing the spotlight FX Breakout Monitor: JPY stealing the spotlight

FX Breakout Monitor: JPY stealing the spotlight

Forex 5 minutes to read
John Hardy

Head of FX Strategy

Summary:  The USD rally has stumbled a bit today on a mixed US jobs report, but JPY strength has been more consistent in recent sessions, accelerated by the ECB’s dovish surprise yesterday and weak equity markets.

For a PDF copy of this edition, click here.

Yesterday’s huge break lower in EURUSD is already experiencing a test of confidence today on a mixed US jobs report (most clearly strong was household survey and unemployment rate drop, least positive was the +20k payrolls versus +180k expected. Earnings rose sharply to a new high for the cycle, but were flattered by a fractional and likely random drop in average weekly hours).

Today’s close will be very important for that pair and for the USD outlook into next week. 

Elsewhere, JPY crosses are showing the most volatility on a suddenly resurgent JPY. But as the JPY has transitioned from weakest to strongest over the last week, it is only just now challenging breakout levels among the JPY crosses we track – EURJPY and AUDJPY look to be the first to break lower as we discuss below. USDJPY could quickly take over the market focus if the USD rally falters elsewhere.

Breakout signal tracker

We added EURUSD and AUDUSD shorts yesterday and the decent follow through lower allows us to pull down the stop in EURUSD from the initial level. 
Source: Saxo Bank
Today’s FX Breakout monitor

Page 1: the EURUSD break lower yesterday was critical stuff, but it needs follow-through and a participation from other USD pairs. Elsewhere, we note the more determined break lower in AUDNZD and EURCHF joining EURJPY in looking at new local lows today.
Source: Saxo Bank
Page 2: The Scandies are putting in a very weak showing today, looking at new cycle lows even against a weak euro. Emerging markets also remain on the defensive on the weak risk appetite. AUDJPY is trading near the breakout level lower.
Source: Saxo Bank

We add EURJPY to the watchlist as the pair has pushed to a new local low – though the critical range low is a bit lower still around 124.00. Further risk-off could favour the JPY more than the USD, judging from the price action of the last few sessions.
Source: Saxo Bank

At the bottom of the heap today in G10 FX are the Scandies, apparently taking their lead from the ECB implications on their own central banks’ ability to normalise. Weak risk appetite is likely another immediate driver. EURSEK is rapidly running out of range ahead of the 10.729 top from last August (and the highest daily close back then was south of 9.70).
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.

: 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.

: 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