Video: Expectations of EURUSD and USDJPY Breaks Pushed to Next Week
•The June US payrolls fell short of the market-moving potential necessary to force a USDollar break
Sign up for a free trial of DailyFX-Plus to have access to Trading Q&A's, educational webinars, updated speculative positioning measures, trading signals and much more!
Following a ten-month rally, the USDollar has spent the past few months developing a congestion pattern. With the boundaries closing in, the potential for a breakout is starting to stir speculators' interests. The same patterns are reflected in many of the dollar based majors - EURUSD, USDJPY, AUDUSD - and even equities. The Dollar is driven by rate expectations while stocks are the domain of 'risk trends'. Yet, both are going to struggle for motivation until more potent drivers come along. NFPs has added to the Fed rate forecast but not settled the debate between hawks and doves. The weekend Greek vote hangs over the Euro and general sentiment. Liquidity is also a hurdle with the US markets off early for an extended holiday weekend. There is plenty of pressure building up, but satisfaction is unlikely to come until at least next week. Given the circumstances, some positions should be taken off (like my EURJPY short) or avoided; while others may present opportunities in exactly the conditions that soothe (such as AUDCAD and GBPUSD). We discuss approach an expectations in today's Trading Video.
Sign up for John’s email distribution list, here.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.