FX Breakout Monitor: USD strength broadening, a gathering storm? FX Breakout Monitor: USD strength broadening, a gathering storm? FX Breakout Monitor: USD strength broadening, a gathering storm?

FX Breakout Monitor: USD strength broadening, a gathering storm?

Forex 5 minutes to read
John Hardy

Head of FX Strategy

Summary:  After zigs and zags, the US dollar is showing its broadest strength in recent memory today – actually breaking higher in places and threatening to do so elsewhere. By early next week we should know if something is brewing here.

For a PDF copy of this edition, click here.

More whiplash intraday for JPY traders after this morning’s rally turned tail and then some later in the session, as gold prices dumped and the longer US treasuries finally sold off a bit. US dollar strength was prominent across the board, sending the greenback to new highs against some EM and now not far from a breakout versus CAD and the EUR and elsewhere in G10 as well. Still, we need to see another leg of directional momentum higher in the big dollar to suggest something bigger is afoot here.

Elsewhere, sterling sagged badly on the day, and we’ve got headline risk coming hot and heavy ahead of the weekend. Does a long delay actually provide further pressure on GBPUSD if the fear is that an extension of uncertainty works against the UK’s favour?

Breakout signal tracker

Our EURAUD short could just make the grade if risk appetite makes a comeback – next key event risk and decider for the position likely next Tuesday’s Reserve Bank of Australia decision. We are looking for long USD candidates for early next week if the USD punches through higher here.
Source: Saxo Bank
Today’s FX Breakout monitor

Page 1: Note the proximity to breakout levels in EURUSD and USDCAD and even GBPUSD for starters (more on the last of these below). We like AUDNZD longs on a break higher from here, but already have long AUD exposure and would like a look at the RBA next Tuesday first. EURCHF continues to run lower and is below the critical 1.1200 level – is some of this on the Brexit uncertainty and sterling backup of the last couple of sessions?
Source: Saxo Bank
Page 2: NOK suffering a bit on the weak oil prices today, with NOKSEK mulling punching through lower. Elsewhere, EM is under pressure against the big US dollar and precious metals are as well – silver on the cusp of interesting level at 15.00 (see below) .
Source: Saxo Bank

GBPUSD looks in trouble of a thorough breakdown if a non-May deal approval leads to the risk of a longer delay and the pair is closing the week or trades early next week below 1.3000.
Source: Saxo Bank

Gold and silver had very ugly sessions today, with silver closer to a pivotal level – the psychological and actual support level for both our short- and longer-term breakouts at 15.00. Note the 200-day moving average as well. A break could lead to a full probe into the cycle lows of 14.00.
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