Which Gives First: USDollar at 3 Year Highs or S&P 500 at Record?
The market is growing nervous. Both the S&P 500 and USDollar have stalled in their respective advances. On the opposite end of the spectrum for risk and stimulus influence, these benchmarks have diverged significantly from their normal fundamental relationship. To jump start the next significant move, we need a jolt in either the Fed's QE3 expectations or outlook for risk appetite (the former likely acting as the catalyst for the latter). In the early hours of Tuesday's trade it seems risk remains buoyant while fears of the Fed's tapering has eased somewhat (hurting the dollar). In today's video, we discuss which scenario carries the higher probabilities and which the greater market impact. We also discuss the best trade opportunities for either shift in this important fundamental balance.
Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.