Trading Video: EURUSD Faces ECB Decision, USDJPY Drops as Risk Spreads to FX

By DailyFx | Updated August 06, 2014 AAA

DailyFX.com -

Talking Points:

• Yen crosses dropped as risk aversion in capital markets spread to FX, but momentum not yet secured

• Euro traders respond to data that shows Italy is in a recession, will the ECB step up its easing today?

• Both the Dollar and Pound are stable after recent moves, but further trend requires active catalysts

Sign up for DailyFX-Plus to have access to Trading Q&A's, educational webinars, updated speculative positioning measures, trading signals and much more!

It looks like there is a rebalancing in volatility and sentiment trends across the financial markets. This past session, the FX market experienced some of the stir that equities have seen through the week's open. The spread of risk aversion to different corners of the market suggests the fundamental driver is gaining a foothold in the speculative ranks. USDJPY and the yen crosses proved the epicenter of the speculative ripple in the currency market, but technicals on these pairs and fragmentation of the theme show that we are still short of full conviction and new trends. Outside the undertow from sentiment, the Euro faces the heaviest fundamental risk. Following data showing a return to recession for Italy, the ECB is set to announce whether it will upgrade its support or not. We discuss themes and data along with trading cues in today's Trading Video.

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

You May Also Like

Related Forex Analysis
  1. Forex News

    Quiet range expected for EUR/USD – FXStreet

  2. Forex News

    EUR/USD: downside risks? – Rabobank

  3. Forex News

    EUR/USD fails to get away from lows

  4. Forex News

    Saudi won’t cut production, WTI Crude falls from day’s high

  5. Forex News

    SEB: EUR/USD 2012 low bearishly violated – eFXnews

Trading Center