Talking Points:
• Status quo reigns with the Dollar holding fast at 11,750 and SPX lacking drive in its climb
• A drop in volatility is not leveraging 'risk appetite' so current market opportunities may surprise
• Ahead, US CPI is top event risk but is it capable breaking the US Dollar from its consolidation?
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The S&P 500's climb is lacking luster even if it does scale new highs and the Dollar continues to work itself into a tighter space. This is a frustrating position for traders to be in - a market stuck in neutral but with trading potential so close at hand. In 'status quo', we are finding a deflating volatility backdrop that is not directly feeding the risk appetite theme we usually associate with such a move. That has undermined the rally for equities and Yen crosses. However, a diminished volatility landscape may offer opportunity elsewhere. In the meantime, should speculative appetite flare; risk aversion is the more loaded sentiment with Yen crosses well positioned for such an impact. Another avenue for opportunity is the eventual Dollar break. A CPI update is due, but its ability to instigate the necessary spark for the Greenback is dubious. We look at the opportunities in the FX market in today's Trading Video.
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