Though we had US elections and Euro-area meetings last week, officials have made progress on neither the Fiscal Cliff nor the Eurozone debt crisis. For Forex traders, that means volatility is still on the menu and risk trends are highly vulnerable. Straightfoward risk aversion would set up pairs like EURUSD, AUDUSD and AUDJPY with greater trade potential...but there are abornmalities that we much account for. Those assets on the high-end of the yield curve have been warped by stimulus and extremely low potential for return, but so too have the safe havens been distorted. We discuss changes in the market and what trades still look good for sentiment changes.
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