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Forex Trading Video: USDJPY and EURUSD Drop as Volatility Rises

Forex Trading Video: USDJPY and EURUSD Drop as Volatility Rises

John Kicklighter, Chief Strategist

Talking Points:

• Volatility surged this past session - particularly in equity markets

• Investors are on edge as the S&P 500 has returned rapidly to critical support to a 5-year bull trend

Yen crosses are more sensitive should risk aversion kick in, but EURUSD may be the most exposed

See the DailyFX Analysts' forecasts for the Dollar, Euro, Pound and Gold through the 4Q on our DailyFX Trading Guides page.

Investor sentiment was put to the test this past session. Wednesday's relief rally from key support for the S&P 500 and other key risk measures quickly and violently imploded. Is complacency finally ready to succumb to volatility? The potential in a full-scale shift in speculative positioning is astounding, but we have seen its ignition deferred time and again. Critical is assessing what cues will signal a genuine collapse in the yield chase. Furthermore, we need to identify what setups are best positioned to take advantage - both in terms of first movers and those with greater momentum should the theme set in. We discuss all of this 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.