Forex: A EURJPY Reversal is Tempting by Faces Risk, ECB Headwinds
• Risk trends and relative stimulus are the market's two primary fundamental themes
• EURJPY is a provocative cross with a tempting technical picture facing headwinds on both drivers
• With the ECB due Thursday and NFPs adjusting Taper expectations Friday, trend resistance is heavy
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The market heaved this past trading session - presenting more than a few signals of a risk-based shift. The EURJPY is one of the best examples of the situation we have been presented with. Sensitive to changes in risk tides and presenting statistical developments that typically indicate reversal, we are are forced to look more critically at the technical progress and the fundamental drive to our recent shift. From sentiment, we have a market that has shown consistent immunity to deleveraging and is distracted by a Fed Taper timetable and Friday's NFPs. Meanwhile, the relative stimulus factor for the FX market is a distraction for euro crosses with the ECB decision on Thursday. Is there enough of a pure sentiment move in the market to offset known and important event risk ahead? We discuss this and the trade implications in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.