EURUSD and USDJPY - One Risks Correction, The Other Reversal
• The USDollar risks breaking not just an important technical level, but bulls' conviction
• US equity indexes have moved into position for an easy break of a 20-month channel if provoked
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Normally, the media and market participants are hyping the risk of reversal or volatility. It seems they under-appreciate it today. Both the US Dollar and equity indexes are standing on the edge of important technical levels - a break from the greenbacks three-month trend and the floor of a S&P 500 channel that stretches back to the beginning of 2013. Symbolic breaks for either of these two can tip large fundamental imbalances to trigger deeper trends. What is the potential this pressure represents? Which faces the larger unwind? Why does the USDJPY appeal through more scenarios while the medium-term EURUSD outlook is bearish even if the greenback slips? We discuss these topics 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.