News Column

Strategy Video: Why EURUSD and GBPUSD May Struggle with Breaks Tomorrow

May 12, 2014

John Kicklighter

Talking Points:

** Effective fundamental analysis is about finding what is important and market-moving

** Relative monetary policy expectations is key for pairs like EURUSD and GBPUSD in a low-risk environment

** Breakouts or trend for either would be difficult to generate ahead of key UK, EU and US data this week

EURUSD crashed into a support that has held the market up for nearly two years on a dovish ECB last week. So, why with the return of liquidity isn't the market breaking lower? While the fundamental developments this past week will exact influence on the market for some time to come, there is an immediate reason to hesitate on benchmark pairs like EURUSD and GBPUSD: event risk. Relative monetary policy is the most important driver for these pairs, and there is critical event risk this week that can redirect these themes - including a US CPI, Eurozone 1Q GDP and BoE Quarterly Inflation report. We discuss why this event risk is important, how it can stall and catalyst the market, and where the trade potential lies in today's Strategy Video.

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Source: DailyFx

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