Quiet Asian Session with Australia away for Anzac holiday
Overnight we saw the surge in EUR/USD and USD/JPY pull back under the pressure of profit taking but the outlook still remains higher for both.
Traders are looking ahead at 3 risk events in coming days.
Firstly today we have North Korean Military celebrations with everyone on edge for another possible missile test and even a possible nuclear test. Such actions will be a test of US Presidents new tough stance on North Korean and would lead to risk off with USD/JPY lower and and gold higher. If no new tests then the risk on rally started from French elections and US tax plan hopes can continue from Monday.
The Trump US Tax Plan is expected to be outlined on Wednesday and is critical for the USD and stock market performance. If there is no detail or if it is too ambitious the market may turn negative on the announcement and unwind some of the recent optimism.
Finally on Thursday we have the ECB meeting where Draghi is one again expected to remain dovish and this could be a key test for recent EUR/USD strength which is threatening to break out of the recent 1.05-1.09 range.
Best Wishes
TonyD
EasyMarkets
