Forex Strategy Video: EURUSD - Picking a Bottom or Natural Correction?
• Tops and bottoms are low probability event, so attempting to trade this is fraught with danger
• With knowledge of event risk - NFPs, ECB - later this week, corrections are more probable events
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Picking tops and bottoms is a naturally low probability endeavor. However, there are few things more consistent than a curb on momentum and deleverage of risk before major event risk. That is the situation we are looking at with EURUSD, EURJPY, GBPUSD and other dollar and euro-based currency pairs. Sharp moves this past week on a shift in the Fed's Taper time table and swell in ECB stimulus expectations will find further validation or complete rejections this week with US labor data and an ECB rate decision later this week. In today's Forex Strategy Video, we discuss what the 'normal' market response would be to such impending risk and how it can shift trade potential for exposed pairs.
Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.