Forex: Dollar and Equities Ready for Yellen Testimony
• Top event risk for Tuesday's session will be the first policy testimony from Yellen as Fed Chair
• Forward guidance is the most likely target for change, and thereby should be trader's focus
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A relatively slow start to the trading week reflects the same conditions as the tentative EURUSD and AUDUSD breakouts this morning - expectation of something bigger ahead. Whether risk trend or dollar-based major, there is nervous regard for Tuesday's testimony by the new Fed Chairperson. Janet Yellen will discuss monetary policy and answer questions in Congress for the first time since taking the helm at the central bank at the turn of the month. While the expectation is for a vanilla event - given central bankers are determined to avoid causing market volatility - there are venues that require clarification. Of particular interest is a possible update to forward guidance considering the Fed's employment targets have already been reached. We discuss this important event and broader risk themes influence on the market in today's Trading Video.
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