Forex: USDollar Rally, EURUSD Tumble a Cue for Risk Trends?
• While the dollar and stock move looks like a risk based moved, conviction is still absent
•Coming up, the docket presents a number of volatility events but trends require stronger medicine
Expect breakouts? Use the DailyFX Breakout 2 strategy to signal or confirm setups!
The USDollar posted its biggest rally in a month and the S&P 500 was once again rejected at its record-high resistance level. To some, this is all the evidence for risk aversion they need. Yet, we must differentiate between a short-term volatility event and a true trend on an underlying fundamental theme like investor sentiment. The trading potential for the latter scenario is significant greater than the former, but the level of conviction necessary to feed such a move is also far greater. We've forced a few technical breaks - EURUSD and AUDUSD have been prominent examples - and a few more may lie ahead. However, that does not necessarily ensure trends are soon at hand. What breakouts should we be look for? What are the catalysts for full-blown trends? We discuss that and more in today's Trading Video.
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