Risk-Off vs. Risk-On Sentiment: The Invisible Forex Driver
Every day, the forex market flips between risk-on and risk-off sentiment. Understanding this shift is crucial in 2025 — it determines which currencies rise and fall regardless of technicals.
Risk-On: Markets feel safe → stocks rise → traders buy AUD, NZD, CAD
Risk-Off: Uncertainty, war, inflation → traders buy JPY, CHF, USD
Risk sentiment is driven by:
Geopolitics (e.g., war, oil shock)
Data surprises (e.g., unexpected inflation)
Equity market behavior
Strategy:
Track S&P 500/Dow + VIX index
If stocks dump & VIX rises → risk-off
Buy USD/JPY, sell AUD/JPY
Confirm setup on chart: liquidity sweep + CHoCH + OB
Risk sentiment is the invisible hand that reshuffles the forex deck every session. Recognize it, and you’re playing with the wind — not against it.
Risk-Off vs. Risk-On Sentiment: The Invisible Forex Driver
Every day, the forex market flips between risk-on and risk-off sentiment. Understanding this shift is crucial in 2025 — it determines which currencies rise and fall regardless of technicals.
Risk-On: Markets feel safe → stocks rise → traders buy AUD, NZD, CAD
Risk-Off: Uncertainty, war, inflation → traders buy JPY, CHF, USD
Risk sentiment is driven by:
Geopolitics (e.g., war, oil shock)
Data surprises (e.g., unexpected inflation)
Equity market behavior
Strategy:
Track S&P 500/Dow + VIX index
If stocks dump & VIX rises → risk-off
Buy USD/JPY, sell AUD/JPY
Confirm setup on chart: liquidity sweep + CHoCH + OB
Risk sentiment is the invisible hand that reshuffles the forex deck every session. Recognize it, and you’re playing with the wind — not against it.