Forex Strategy Video: USDJPY a US Debt Crisis Trade Only with a Solution
• Congress has less than three days until the US hits the Treasury's debt ceiling deadline
• Should crisis be averted, both risk trends and the dollar stand to recovery lost ground
• Where most 'majors' will be mixed on a resolution, USDJPY could leverage such an outcome
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The US government now has less than three days to avert a financial disaster. Yet, despite the risk, politicians and investors seem optimistic of a happy resolution. While that may seem an ideal situation for AUDUSD as a 'risk on' move above 0.9500 or EURUSD tumbling below 1.3500 as the dollar recovers lost ground, these pairs would in fact face contradictory fundamental reactions as both risk appetite and dollar recovery come into play. USDJPY represents a pair that can leverage both aspects of a debt solution outcome. Yet, the key technical break above 98.50 isn't the only factor needed for me to trigger a trade. In today's Forex Strategy Video, we discuss the necessary patience and fundamental confirmation necessary to trade this important event risk.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.