Forex: A Risk Aversion Wave Tempts with SPX, EURJPY, GBPUSD
• 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
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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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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.