Talking Points:
• We have yet to make the jump from volatility to lasting market trends...despite the EURUSD's plunge
• While we wait for risk or stimulus expectations to shift, there are plenty of setups to watch
• Euro pairs face GDP-based volatility, while Pound pairs question the yield forecast on key data
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Risk trends and Fed stimulus plans are still dominant topics for the bigger trends in the FX and capital markets, but there are other aspects that can offer us trades while we await their arrival. The Euro has become an active fundamental case once again with the ECB's unexpected, dovish move this past week. There are larger ramifications to the rate cut and stimulus guarantee that will pair nicely with hefty volatility events (like Eurozone 3Q GDP) this week. Meanwhile, the sterling perhaps carries the most distinct penchant for volatility with congestion on pairs like GBPUSD and GBPJPY setting up potentially explosive situations with event risk like CPI data and the BoE Quarterly report. We discuss thresholds for larger trends and the trade opportunities for short-term term developments in the weekend Trading Video.
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