Trading Video: Don't Trust These EURUSD, GBPUSD and USDJPY Breakouts...Yet
• A drop for the US Dollar is the common denominator in this equation, but its motivations are questionable
• The fundamental drive behind the dollar remains dubious and market conditions are trend favorable
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Many of the majors were slammed to extremes this past session as the dollar collapsed. EURUSD made a move back towards the 1.4000 level the ECB seems intent on protecting, USDJPY broke a 15-month rising trendline and GBPUSD extended five-year highs. Is this the breakout that will restore volatility for the broader FX market? Looking at the source of this move, 'explanations' have ranged to delayed NFPs response to tempered growth forecasts for the US. However, this may simply be a normalization of the extreme level of inactivity posted the day before. Without a definable driver for investors to rally behind, with market conditions still working against breakout and trend, and with a number of central banks making explicit threats against exchange rates; this will be a difficult move to feed. We discuss burst of volatility and its trade repercussions 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.