Talking Points:
• Headlines covering Greek negotiations were once again swinging violently from optimism to pessimism
• An RBNZ rate cut may have been a distict probability, but a sharp Kiwi drop reflects substantial surprise
• Yen crosses tumbled on the same day global equities rallied
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The FX market was a volatile mix of pointed headlines and sharp exchange rate moves this past session. And, there is plenty of reason to expect that instability to continue. Among the headlines over the past 24 hours, Greece once again proved a journalist favorite with updates of progress on negotiations quickly contradicted by news that the situation was actually backtracking. Trading the Euro now is something one does at their own risk. Far more definitive in its influence was the RBNZ rate decision's explosive drive for Kiwi bears. The rate cut may not have been a complete surprise, but it was enough of a shock to mark the biggest tumble in months. Finally, there was another casualty of risk trend volatility - but this one contradicted our expected link. A Yen cross tumble that occured at the same time equities rallied. These themes were certainly critical this past session, but their influence is certainly going to carry forward. We discuss them and their trading implications in today's Trading Video.
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