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Forex pairs in this Article » GBP/USD, USD/JPY, EUR/USD, AUD/USD, EUR/JPY, AUD/JPY, NZD/JPY
Talking Points:

• The 'risk aversion' theme is still in control, but critical breakouts now require momentum

• An ongoing US debt standoff and surprisingly Taper-friendly FOMC minutes keep fundamental pressure on

• We look at risk trades like EURJPY as well as pairs like GBPUSD that are less vulnerable

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The high profile technical breaks have been made by both the S&P 500 and USDollar to support a risk aversion theme. Yet, a break alone does not make a trend. Follow through on the negative sentiment shift has been slow to develop despite the fiscal standoff in Washington. The pressure has further built behind the bears' case this past session with FOMC minutes that puts the Taper back in the market's purview along with growth and financial stability warnings from the IMF. Is the market going to heed the warnings and deleverage or reenter on the dip in expectation of persistent quiet? We discuss the market backdrop along with setups that are both sensitive and resistant to risk trends.

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