Talking Points:

• Underlying fundamental themes - namely risk trends - still lack the drive needed to engage momentum

EURUSD is one of the most at-risk pairs for breakouts between capital flows and ECB threats

• Meanwhile, a 'necessity' GBPUSD breakout and tepid NZDUSD reaction to the RBNZ remind us of next steps

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.

Breakout pressure is building across the board - from high-minded fundamental themes like 'risk appetite' to individual currency pairs running out of trading room. What instigates that inevitable break is of critical importance for whether the move will transition into a lasting trend or will simply sputter immediately after passing its technical bounds. Looking at the market from a top-down approach, US and global equities maintain their larger bias but struggle to revive momentum after the holiday liquidity drain. Meanwhile, different currencies and pairs are acting on unique drivers. EURUSD is flashing the most extreme activity readings (and thereby breakout risk) in years as capital flows crash against ECB threats. GBPUSD has worked its way to the end of a range, but a lack of fundamental conviction may see it peter out quickly. Even NZDUSD is keeping to range despite a second rate hike by the RBNZ. We discuss motivation and conviction in today's Trading Video.

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