- Market volatility risks drop considerably on Greek agreement with creditors
- US Dollar remains in control, steady uptrend
- High volatility in Commodity Bloc remains our focus via the Breakout2 trading system
Volatility prices have tumbled as an agreement between Greece and its creditors takes significant tail risk off of the table. We’re shifting trading biases accordingly.
The US dollar has remained our favored trade across the board as clear market uncertainty fueled demand for the safe-haven currency. A sharp drop in volatility prices removes one fairly important pillar of support for the US currency, but a continued overnight rally suggests the dollar isn’t done quite yet.
Forex Volatility Prices Drop Notably on Reduced Greek Risks, Focus turns to Commodity Bloc Pairs
Data source: Bloomberg, DailyFX Calculations
Thus our focus turns to US dollar trades versus the Commodity Bloc—the Canadian, Australian, and New Zealand dollars—as the Greenback hits fresh highs. And indeed our volatility-friendly Breakout2 remains attractive on a handful of currency pairs.
A key caveat is that our trading biases could change if we see a similar drop in Commodity Bloc volatility, but until that happens we’ll stick to our recent calls.
See the table below for full detail on market conditions and preferred trading strategies.
DailyFX Individual Currency Pair Conditions and Trading Strategy Bias
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com