Forex Strategy Video: Why Didn't EURUSD Collapse on the Senate Deal
• A Senate debt ceiling deal has bolstered confidence that a US-based crisis will be averted
• Yet, the 'relief' that this development offers applies to both the dollar and risk trends
• With EURUSD, we see risk versus dollar recovery; and it is better to trade on the victor
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The US government seems on the verge of debt ceiling and government shutdown deal that would lift the uncertain and fear from the markets. Yet, armed with this development and monitoring a clean Head-and-Shoulders technical pair; those expecting a EURUSD in the aftermath were surprised to see setup refuse to play out. The problem here is not the technicals, but rather the dueling fundamental implications. While a 'relief' for the dollar is certainly a factor, it competes with the risk appetite correlation that EURUSD historically touts. One of these elements only has limited shelf-life and the other is a lasting theme. That said, don't expect risk trends to simply explode higher from here. We discuss the dollar and risk impact of a debt deal in context of EURUSD in today's Forex Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.