DailyFX.com -

Talking Points:

• 'Pricing in Perfection' is a term that looks to label over/under-valued markets rather than tops/bottoms

• True tops and bottoms seldom occur, but a trend can see its momentum fade if its premium is bloated

• We weigh the claims of 'pricing in perfection' for the S&P 500, British Pound and US Dollar

See volume behind the majors during the NFPs and ECB rate decision to gauge your trading approach using the free FXCM Real Volume and Transactions indicators.

'This market is pricing in perfection.' This is a label applied to an instrument or asset class that has exhausted the potential in an underlying fundamental or systemic theme. In practice, that means the market doesn't have to put in a top/bottom and reverse immediately. Rather, it reflects a limitation for extending an existing trend via its premium, and a substantially greater potential in a reversal - if and when it occurs. We discuss this phrase and fundamental assessment - with a review of the S&P 500, British Pound and US Dollar - in today's Strategy Video.

Sign up for John’s email distribution list, here.

You May Also Like

COMPANIES IN THIS ARTICLE
Related Forex Analysis
  1. Forex News

    Coeure instigated this sell-off - Rabobank

  2. Forex News

    EUR/USD holds above 1.1000 ahead of Yellen speech

  3. Forex News

    Yellen: A double-edged sword - TDS

  4. Forex News

    EUR/USD set to continue towards lower levels – EW-Forecast

  5. Forex News

    GBP/USD: technicals providing an early warning sign – Scotiabank

Trading Center