Forex Before You Attempt a EURUSD Reversal or Jump on a USDJPY Trend...

Talking Points:

• There are tempting, medium-term tech setups on extended yen crosses, a six-day EURUSD rally and others

• Fundamental themes such as the Fed Taper, European and BoJ stimulus, and risk threats seem imminent

• Yet, market conditions are defusing clean patterns and muffling favored speculative themes

Use the consecutive bar indicator to measure the historical significance and over-extended level of the markets.

EURUSD has extended its best run in 12 months and the yen crosses stumbled at multi-year highs. Yet, we shouldn't expect these developments to translate into hefty trade options. The December liquidity drain is breaking otherwise dominant speculative themes like Fed Taper speculation, BoJ stimulus expectations and a fundamental dearth to the record high US equity markets. That doesn't mean however, that there aren't trade opportunities or that these prominent themes won't move markets. In today's Trading Video, we discuss trading approaches in our current market conditions and the event risk that can better stir volatility.

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