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Forex: Risk Culls Yen Cross and Equities Tumble, Focus on GBPUSD

Forex: Risk Culls Yen Cross and Equities Tumble, Focus on GBPUSD

2014-01-15 04:38:00
John Kicklighter, Chief Strategist
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Talking Points:

• The anxiety-inducing drop from equities to open the week stalled Tuesday, curbing a yen cross bear trend

• Event risk in the coming session presents limited scope for changing scales of sentiment

• Fed Taper views and monetary policy take the reins on pairs like GBPUSD, USDJPY, EURUSD

Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.

It seems the opening tumble from equities and yen crosses this week was another false (or premature) signal to a market-wide sentiment shift. Risk assets stabilized this past session, and so did the dollar as Taper speculation was reinforced. This combination of factors stopped my USDJPY short and put a stopper in the big-ticket trend changes. However, where the big risk reversal has fallen short; we still have trade-defining market conditions as well as an active theme in relative monetary policy. We look at equities, the yen crosses, EURUSD, GBPUSD and other markets in today's Forex Trading Video.

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