Forex: EURJPY Breaks Multi-Month Support, Time to Short?
• The Euro crosses dropped on a reduction in growth forecasts from the EU
• With the ECB decision on Thursday and NFPs on Friday, trend trades are a risky venture
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A drop from the Euro this past session drove EURUSD back to tense support while EURJPY actually broke a five-month trendline. Technically, these pairs look primed for prominent trend changes; but fundamentals complicate this clean trade scenario. The move from the euro crosses was derived from downgraded growth forecasts from the EU, which adds to the currency's recent troubles with stimulus and rate forecasts. However, even if these Euro-specific issues gain traction, the market will give way to more prominent fundamental themes - like risk trends. With the ECB decision on Thursday to clarify the euro's outlook and risk trends awaiting the Friday NFPs' influence over the Taper time frame, medium-term swings are risky propositions - especially those associated with breakouts or reversals. We discuss the Euro versus risk trade conditions in today's Trading Video.
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