Forex: Can NFPs Provide Follow Through on EURUSD's 1.3800 Breakout?
• Where this most liquid currency pair broke higher, the fundamental catalyst isn't good trend fodder
• Follow through for EURUSD, dollar selling and bullish risk trends now falls in the hands of US NFPs
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EURUSD cleared the upper bound of a multi-year wedge pattern this past session with help from the ECB rate decision. Yet, this break needs more support to transition into a lasting trend. Can the NFPs upgrade this move? On the one hand, the US employment data has been met with increased apathy over the months as joblessness approached the Fed's 6.5 percent target - even after the Taper began. Both the dollar and risk trends (S&P 500) seem to have discounted the gradual shift in US stimulus. On the other hand, the market can't ignore the changing tide forever. Risk exposure and leverage are tied to the complacency that was nurtured by a multi-year Fed stimulus regime. Meanwhile, weather discounting, record high equity levels and a more sensitive volatility environment stand ready to generate short-term opportunity and perhaps even feed trend. We discuss this event risk and the market's trade potential in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.