Forex: EURUSD Plunge Hides Uneven Dollar Performance
• EURUSD posts biggest drop in over a year, but this was not the doing of the dollar or risk trends
• A drop in inflation and rise in unemployment have shaken the euro and revived stimulus fears
• Meanwhile, the market has yet to find a consensus on its risk outlook post FOMC
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The biggest daily drop for the benchmark EURUSD in 16 months roused FX traders attention. Yet, this incredible performance may not present the broad implications that some may expect. Given this pair's stubborn relationship to traditional risk trends and its enduring fundamental drive of reserve diversification, there is room to believe that either sentiment or the dollar have leveraged a significant drive. That was not the case however as we've seen with many other benchmarks. A shift in euro fundamentals may significantly alter its perceived stimulus advantage, but strong will that concern prove and will it spill over to other markets? We discuss the euro's move and the bigger picture for the majors and risk trends in today's Trading Video.
Use the consecutive bar indicator used in today's video to measure the historical significance and over-extended level of the markets.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.