The FX Breakout Monitor is back, and it is expanded with “autosignals” that show examples of how to trade new breakouts, defined as new 19-day high or low closes not preceded by a breakout in the same direction in the prior week. Click on the link below for a look at the full PDF of the table overview and the Recent New Breakouts tables. See further below for a couple of chart highlights related to today’s monitor.
Today’s Breakout monitor
We are largely seeing extensions of recent themes in the latest market action – especially in sterling trades continue to power through to the strong side despite this weekend’s indecisive outcome for Johnson’s Brexit deal and the uncertainty on whether we will see a vote on the deal this week (even this evening) or not until after a delay to January has been agreed with possible elections in the interim.
Elsewhere, the USD continues to extend the lower outside of USDJPY, with “new” breaks (the first in at least a week) below the 19-day low close on Friday’s close in USDSEK, USDCHF and USDRUB adding to the three breaks lower for the USD recorded on Friday (against NZD, AUD and THB).
Note in the auto-signals list that the weak performance (stop-outs) of the recent sterling upside breaks is due to the “automatic” setup for the signals – the big break higher in sterling on Friday the 11th saw a big back-fill day on the subsequent Monday that extended more than 1.05 ATR (the default distance to the stop). Normally a trader would not enter “at close” on a given day, especially a Friday, but look to work an order on the following day and adjust the distance to the stop relative to recent volatility (thus also decreasing the size of the overall position to keep the risk per trade as a constant) so in reality the break has performed quite well to date on a reasonable entry long GBP on Monday the 14th in many pairs, using a wide-ish stop, that traders would now have moved significantly higher. (Standard holding period is 9 days)
Today’s Breakout Highlight: USDSEK
The Swedish krona has firmed up well over the last few sessions, in part driven by last week’s revelation that the Swedish statistics agency responsible for reporting unemployment data has reported that the data may be underestimating the strength of the Swedish jobs market, a factor that could ease any sense of panic from the Riksbank this week. The SEK has indirectly also been riding the coattails of a stronger sterling, as hopes for a smooth Brexit bring relief to the outlook for EU- and Swedish exports. The latest price action here is beginning has provided a fairly profound rejection of the recent new highs above 9.90, but a full trend reversal needs to see the destruction of the rising channel-like formation and push well south of 9.50. In addition, there is a bit of a pivot area around 9.60 that needs to be taken out for a more profound break.
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 is not intended to and does not change or expand on this. 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/en-mena/legal/disclaimer/saxo-disclaimer)
