Forex: Looking for Short-Term S&P 500, Dollar Taper Adjustments Before Weekend
- Both GBPUSD and AUDJPY find breakout on a fundamental spark, but trade potential differs
- Before the weekend and next week's Fed decision, short-term setups have better potential
- The week's 7-day S&P 500 rally and four-day decline present reversal potential on risk the majors
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We are heading into the final 24 hours of the trading week before a pivotal policy decision is expected to be delivered by the Fed. There is limited scope for expecting sizable moves. A perfect illustration of this restraint is GBPUSD, which broke a decisive technical pattern but failed to generate the momentum that would we would expect on such a move. Meanwhile, short-term corrective moves by AUDJPY, EURJPY and other pairs Thursday better fit the conditions we currently face. After a seven-day rally from the Fed and four-day drop for the USDollar - an aggressive speculative move given what lies ahead - there is notable potential for short-term corrections moving forward. We discuss the Taper risk, the risk of adjustment and their trade opportunities in today's video.
Find out what event risk can threaten the trade setups discussed in today's video with the DailyFX Economic Calendar.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.