FX Breakout Monitor: USDJPY leading the USD charge higher FX Breakout Monitor: USDJPY leading the USD charge higher FX Breakout Monitor: USDJPY leading the USD charge higher

FX Breakout Monitor: USDJPY leading the USD charge higher

Forex 5 minutes to read
John Hardy

Head of FX Strategy

Summary:  The US dollar is charging hard against the lowest yielding DM currencies, led by what looks to be a fresh breakout higher in USDJPY. Elsewhere, watching whether the RBA tonight encourages or dashes AUD bulls’ hopes.

For a PDF copy of this edition, click here.

The US dollar staged a solid comeback rally late Friday as US yields rose on the back of a reasonably strong US employment report and ISM Manufacturing survey. Bond traders may also be looking at a heavy auction calendar this week from the US treasury (auctions over next three days of 3-year, 10-year and 30-year paper). 

Breakout signal tracker

We will endeavor to track a curated list of the breakouts we highlight and find technically compelling – our first signal on the new tracker list will be today’s USDJPY break. Strictly speaking, we should be waiting to ensure that today’s close in USDJPY is above the prior 19-day high close – which as can be seen below in the FX Breakout Monitor is currently 109.78. So if we close back below that level more than a couple of pips, we negate the signal and take the loss tomorrow.
Source: Saxo Bank
Today’s FX Breakout monitor

Page 1: The greenback has surged to new highs versus the JPY and CHF, with break levels still rather far off elsewhere. In fact, USDCAD has just retreated slightly from a break lower late last week, suggesting this is as much about JPY and CHF weakness as USD strength at the moment. EURJPY is proving that point as well, pulling once again to a more definitive high close on Friday to search out new resistance levels. We would also highlight AUDCAD ahead of tonight’s Reserve Bank of Australia meeting – as a break could be imminent there if the central bank waxes sufficiently dovish to see the price action stick lower tomorrow.
Source: Saxo Bank
Page 2: USD strength seen here as well in the form of a new break higher in USDSEK, should the pair close north of 9.0850, but do note that on the chart, there is an enormous overhead resistance stretching as high as 9.25. In the meantime, EURSEK is stretching to significant new highs after clearing the range late last week and then getting a bit bogged down. Note that USDMXN is the USD/EM pair closes to a new 19-day high close on our list after consolidating in a narrow range for more than three weeks.
Source: Saxo Bank

USDJPY trying to clear the clearly marked range high of 110.00 today – watching closely into the close and shifting focus toward the 200-day moving average above 111.00 should the break succeed as US yields head higher – or not – over this week’s large US treasury auction.
Source: Saxo Bank

EURJPY closed at a new high already on Friday, the best of the recent attempts. Quick traders playing for a break should have already had a look at getting long on the open today at closer to 125.50 than the current 125.90 area for a go at perhaps 127.50 or higher.
Source: Saxo Bank

Another interesting pair here is USDCHF, given the EURCHF continues to look higher as well as the USD generally firms up. The pair is staring down the massive parity area once again. We have a bit less interest here until EURUSD shows more downside interest, but perhaps CHF weakness is sufficiently profound to drive the pair well above parity to the former major high above 1.0100. 
Source: Saxo Bank

Keeping an eye on AUD pairs with tonight’s RBA meeting and other Australian data points – if AUD sells off, most AUD pairs are in a reversal-from-strength situation as opposed to a breaking down situation. The exception is AUDCAD, which could look sharply lower and break new ground on dovish guidance from the RBA.
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.  

Breakouts: 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.

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article


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)

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 is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo 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 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