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Twice a year the markets absorb the testimony of the Federal Reserve chairman in regard to forward economic prospects, as well as the reasoning of what came before. Both six monthly reviews come in the middle of earnings season, and therefore tend to create a reaction, that analysts tend to place the blame of at the feet of the Fed. In reality, the earnings numbers are the key points, that when added to the trend of the Fed sentiment, tends to create a market that needs a good reason to move, and hold.

The moves tend to create a trend that go on to hold through the next two or three months of trade, and it seems as though July will be no different. Earnings are in, the Fed chat is out of the way, and the markets are positioned to easily transpose the rhetoric into forex moves. This week tends to be the pre-cursor that of what is to come.

Global equity and commodity markets have moved, however, forex pairs in general have stood still since Monday’s U.S. session open. The Usd has gained 90 pips in total since then against five of the six major pairs, not bad for a currency that many are calling as being in free-fall. It is only Usd/Cad that has tagged on more than 100 pips since the Wall Street session got underway at the beginning of the week.

Trade signals have been intra-day, and very reactive to momentum swings, in happening within two or three 30 minute chart patterns that are then struggling to hold. That however may be the last distribution phase of liquidating institutional positions before a major move happens that gets in-line with global market drivers. If so, the euro’s 1 pip, the 7 pips on yen, 80 pips on cable, 10 on aussie, and  six on swissy, since the start of the U.S. week, may lead to a break-out that delivers sustainable moves as next week unfolds.

Until we look back on a week that the headlines scream ‘Usd Weakness’ it is hard to understand the lack of forex movement. However, when we look at the fact that outside of Usd/Cad, the dollar has gained this week since the Monday U.S. session, we get to understand that the divergence in global markets and currency values may quickly get back in line. Watching failed break-outs is fine, and channel trading offers unique rewards, but forex traders need to get ready for the break; the cad has signaled that the market is ready to take each pair on a move, and next week’s calendar is likely to offer the instigator