Trading Video: EURUSD, EURJPY and SPX Ready to Cave if Risk Collapses

Talking Points:

• A building fear from European markets was amplified by troubles with a major Portuguese lender

• Regional concerns are no longer finding an apathetic market as volatility lurched higher

• For trends to develop, the next step needs to be elemental - the VIX, SPX and EURUSD will be barometers

Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategiesfor Breakout, Range and Momentum to adapt to these market shifts.

We finally seem to have found a pulse in the financial markets. Global equities slumped and volatility readings picked up this past session, helped along by fear and heavy selling pressure surrounding a large Portuguese lender. Alone, it may not be material enough to draw direct comparisions to the Eurozone crisis a few years ago; but this is not the first crack the market has noticed. The tipping point for broader market conditons however remains cross-asset volatility. Should this activity measure rise, it will be difficult to maintain the euphoric complacency that has carried us recently. Though there are many opportunities should the tides turn; our initial focus in this Trading Video are the S&P 500, EURUSD and EURJPY.

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