Forex: Volatility Stirs GBPUSD, AUDUSD but Fed Curbing Follow Through
• The lead up to Wednesday's FOMC meeting is throwing off the market's risk compass
• Traditional correlations through risk trends and stimulus forecasts are distorting in the lead up
Sign up for John’s email distribution list, here.
There are technical patterns amid the majors and crosses pining for breakout. And some, like AUDUSD and GBPUSD, are even making preemptive moves. The problem is not the breakout, but follow through. With the FOMC rate decision (among other important events) due in less than 48 hours, there is a glaring risk of a seismic shift in the fundamental bearings of the market. That kind of uncertain stokes fear for the majority and throws the breaks on trend development. On the other hand, the same conditions can leverage short-term volatility and force tight technical congestion patterns - of which there are many in the FX market. In fact, those sharp drops for the Aussie dollar and pound may reflect exactly those conditions. We discuss how to trade in these unusual conditions with a view of the bigger fundamental picture in today's Trading Video.
Sign up for DailyFX-Plus to have access to Trading Q&A's, educational webinars, updated speculative positioning measures, technical setups and much more!
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.