Video: Event Risk Can Set Off Volatility, but Carry Trends?
• The FX market is finding more of its drive from monetary policy rather than traditional 'risk' trends
• Yet, a curb on sentiment due to the holiday conditions in US trade can seriously dampen trend development
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With the FX market focusing more intently on monetary policy rather than the muddled bearings for general sentiment, there is a greater chance of volatility as the week progresses. However, a deeply liquid market and some sense of speculative appetite likely needs to be roused to generate a true and progressive trend - whether from global equity indexes or EURUSD. That view of market conditions sets the stage for trade approach. Rather than projecting the combination of key technical levels and noteworthy event risk resulting in the spark of a massive trend, we are more likely to see short-term and volatile swings on properly motivated pairs. We take a short-term view of EURUSD, USDJPY, GBPUSD, AUDUSD, NZDUSD and other pairs 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.