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Forex: A Risk Aversion Wave Tempts with SPX, EURJPY, GBPUSD

Forex: A Risk Aversion Wave Tempts with SPX, EURJPY, GBPUSD

2014-01-03 02:51:00
John Kicklighter, Chief Strategist
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Talking Points:

• There was a strong 'risk aversion' signal across equities, FX and volatility measures Thursday

• Liquidity is still a concern as conviction is particularly critical for counter-trend trades

• I am watching but holding back on setups like EURJPY, EURUSD, GBPUSD and others

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This is what traders like to see - the first full day of trading in the New Year offers a surge in volatility and threat of a prominent trend reversal. But, what is the probability of mounting a full-scale countertrend directly out of the gate, especially when a lack of liquidity can still undermine momentum? In today's Forex Trading Video, I look at this provocative sentiment shift - with its tempting implications for pairs like EURJPY, EURUSD, GBPUSD among others - and lay out what I need to cue my entry as well as my reservations about jumping in guns blazing.

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