Trading Video: EURUSD and USDJPY Flash Extreme Contrarian Readings
• The quality of market backdrop has eroded to short-term, speculative appetite
• After a heavy round of data, a jostled US dollar still finds its rate forecast holding up
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Activity in the FX markets picked up this past week, but critical breakouts and trend remained elusive. Having survived NPFs, GDP figures and a FOMC rate decision without a seismic shift in sentiment and market bearing; short-term speculators are moving back into the market. Appetite for short-term moves to buy dips and 'sell vol' is growing again - wearing away the foundation of strong and steady markets. Meanwhile, measures of volatility have moved to new extremes - flashing warning signs for the contrarian-minded. EURUSD and USDJPY in particular tout extraordinary readings. We discuss problematic circumstances and what it means for our trading in the weekend Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.