Talking Points:
• The docket is light this week, but the market's distrust in risk trends keeps the S&P 500 in focus
• Fed rate expectations continue to ease, keeping the dollar in check and EURUSD from trend
• UK inflation data is top event risk over the coming 24 hour period with GBPUSD near channel support
Expect breakouts? Use the DailyFX Breakout 2 strategy to signal or confirm setups!
Risk trends and rate expectations remain the top two fundamental themes for traders to gauge for trend and momentum. The imbalance in both themes presents considerable medium-term trade potential in the FX and capital markets; but recognition matters only so far as the market eventually conforms to those new realities. That requires data, guidance and catalysts. For the S&P 500 and 'risk' trades, the catalyst is constantly elusive; but certainty of a change in tack is growing louder with each day. Meanwhile, interest rate expectations have set particular time frames between the US, Eurozone and UK groups that extend what data and policy officials suggest. What do these themes, biases and upcoming event risk mean for trading? We discuss that in today's Trading Video.
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