Forex trading short USD/JPY? – Santa Claus rally: Analysts aren’t sure, trading CAD strength [Video]

In today’s Market Outlook, let’s take a look at Forex Trading on CHFJPY, USDJPY, EURUSD, USDCAD, the FTSE100, and the S&P500.

Every December, traders and investors prepare for the Santa Claus Rally but right now, analysts are 50/50 as to whether we will see one this year.

The Santa Claus Rally affects stock indices like the FTSE100 and the S&P500.

Some analysts are saying that because the stock markets have been in a long rally, we may not see one this year.

However, if we see pullbacks, like this on the FTSE100, we may have an opportunity to buy the dip.

Be careful though, as we may not see the rally until late in the month or even into January.

But for this week, we have an incredible amount to watch and to trade.

Tomorrow we have Interest Rate decisions from Canada and the United States with no change predicted from Ottawa and a 25 basis point drop predicted from Washington. 

This should be good for the US indices and also create weaker USD but, is this already baked in?

We are seeing mixed strength and weakness on USD pairs so the proposed drop in interest rates should give us some volatility to trade after the event.

The most interesting pair might be USDCAD with a strong CAD yesterday.

Will the downtrend continue?

Technically, we have a very overbought stochastic oscillator but a MACD looking just the opposite, but tomorrow’s economic news may give us some direction.

And, as I am always saying, pay attention to the statements and speeches after the news.

These almost always move the markets.

OK, you may have noticed that JPY has gone weaker again.

This often happens when, like yesterday, Japan experienced a strong earthquake with tsunami warnings.

You will note that every JPY pair is technically overbought so, if history holds true, and the fears subside, we may see short opportunities with pairs like USDJPY.

And CHFJPY where price action is approaching the upper trend line in this bear run.

Keep in mind that the SNB will be announcing their Interest rate and holding a press conference Thursday so expect volatility.

That’s all for now.

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