Dollar Loses Traction, Risk Turn Shallow, Pound Tumbles
• Another drive by the Dollar has stalled out as liquidity overrides the dense 48 hour period of event risk
• A drop in global equities pulled up before traders would commit to genuine risk aversion
• Dovish rhetoric from BoE officials pushed the Pound lower and pairs like GBPAUD and GBPJPY to technical levels
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Speculative moves by two of the global financial system's most prominent players - the US Dollar and S&P 500 - failed once again to achieve liftoff. For the Greenback, the bullish run Monday stalled before the index could close any closer to 12 year highs and well before EUR-USD could stretch to 1.0500. While there was a particular inflation disappointment in the dense round of data Tuesday, the curb was more likely the result of market conditions. The same is true of early tumble in US and global shares that leveled out before the close. Chasing trends and 'strong' market moves (breakouts or major reversals) in these conditions is a stretch. Certain range setups that set time frames, targets and stops at more reasonable length are better suited for our trading environment going forward. We look at false harbingers and more appropriate outlets 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.