Video: Dollar, Pound and USD/JPY - Seductive but Dangerous
- The Pound gapped higher to start the week with pairs like GBPUSD, GBPAUD and GBPNZD marking significant progress
- Risk trends, Dollar recovery and Yen cross revival have all attempted conviction but face serious hurdles
- With major event risk ahead (Fed; RBNZ; BoJ; US, UK and Eurozone GDP), beware the risks ahead
Add the Pound to the list of currencies that offer an unbalanced but profoundly alluring appearance to ambitious traders. GBPUSD and the Pound crosses offered a gap to start the week with a number of its pairings using the opportunity to win key technical progress. The problem is follow through. The same issue arose with the Dollar and Yen cross rallies through the end of this past week. Meaningful technical progress and considerable volatility with certain pairs, but ultimately hampered but the unknown ahead. Little more than 24 hours ahead, we have heavy event risk including: the FOMC rate decision; BoJ rate decision, RBNZ rate decision and UK GDP. All of this event risk is known for a heavy volatility impact, but it also carries profound potential to single-handedly develop trends for their respective currencies. That represents significant risk for the Dollar, Pound, Yen and New Zealand Dollar. In today's Trading Video, we account for the action and event risk ahead to weigh the risk-reward that may be more dangerous than a singular focus on technicals would suggest.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.