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Forex: Will the USDJPY Rally Continue and S&P 500 Breakout?

Forex: Will the USDJPY Rally Continue and S&P 500 Breakout?

John Kicklighter, Chief Strategist

Talking Points:

• We are heading into a seasonal period of lower activity created by a drop in liquidity

• For markets and currency pairs sensitive to risk trends, short-term opportunities are preferred

• A predilection for stimulus speculation can offer Yen crosses more trend than Dollar pairings

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There are a number of tempting technical setups in the markets - chief among them a tight S&P 500 wedge at record highs. The problem, though, is a risk-trend killing US holiday. While a breakout from risk-dependent benchmarks like US equity indexes, the US Dollar or AUDUSD amongst others is possible; follow through is far more difficult to determine over the next 48 hours. A market increasingly tuned into stimulus expectations can amplify certain headlines and currencies; but in general, the preference is for short-term trading through the coming session. We filter attractive technicals against objective fundamentals and market conditions for pairs like EURUSD and USDJPY in today's Trading Video.

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