EURUSD Forces Bullish Breakout, Yen Crosses Contemplate Major Reversal
•Yen crosses seem to have picked up where stocks left off, but this is a monetary policy move...so far
• Greater convinction in a 'mid-2015' first Fed hike is driving the dollar lower
Expect breakouts? Use the DailyFX Breakout 2 strategy to signal or confirm setups!
The yen crosses are tumbling, but equities have stabilized and the safe haven dollar has collapsed. If we were looking at this picture through a 'risk' lens, we would be left confused. Rather than different assets reflecting a mixed view of heavy sentiment trends, this is a market focusing on other catalysts - like monetary policy - and being misinterpreted as a jumbled risk picture. Assessed this way, we see yen crosses dropping after the BoJ quashed fresh QE hopes, a dollar dropping as yields show the first Fed rate hike fade and a pound that has seen its own rate hike timetable reinforced. In today's Trading Video, we discuss the key drivers for the FX market and identify which are strong enough to force trend reversals or breakouts.
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