US DOLLAR OUTLOOK: USD PRICE ACTION PROBES TWO-YEAR LOWS AS VIX ‘FEAR-GAUGE’ FLOPSUSD worth motion flirting with contemporary two
US DOLLAR OUTLOOK: USD PRICE ACTION PROBES TWO-YEAR LOWS AS VIX ‘FEAR-GAUGE’ FLOPS
- USD worth motion flirting with contemporary two-year lows as US Greenback nosedives
- DXY Index staring off the sting of a cliff amid sustained US Greenback weak spot
- The US Greenback may stay underneath stress with the VIX ‘fear-gauge’ imploding
The US Greenback is buying and selling on its again foot once more as USD worth motion plunges decrease in opposition to key FX friends. Information that president-elect Joe Biden will formally start the transition course of helped propel a risk-on transfer, which possible piggybacked available on the market’s upbeat response to phrase that former Federal Reserve Chair Janet Yellen can be tapped for Treasury Secretary.
Additionally, worse-than-expected shopper confidence information launched shortly after the New York opening bell this morning may have contributed to an unwind of the optimistic response by USD worth motion to a strong US PMI report yesterday. US Greenback weak spot throughout the board correspondingly drove the US Greenback Index again right down to two-year lows.
Beneficial by Wealthy Dvorak
Introduction to Foreign exchange Information Buying and selling
DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (30 JUL TO 24 NOV 2020)
Chart by @RichDvorakFX created utilizing TradingView
On a much less pessimistic notice, nonetheless, the US Greenback Index nonetheless hovers barely above the psychologically-significant 92.00-price stage highlighted by its 31 August and 23 November intraday swing lows. The DXY additionally trades a contact above the 01 September intraday low, which could function one other potential demand zone for US Greenback bulls if sellers attempt to make a deeper push. The decrease Bollinger Band may additionally present an space of buoyancy, whereas the downward-sloping 20-day easy shifting common would possibly preserve a lid on any rebound makes an attempt.
Beneficial by Wealthy Dvorak
Foreign exchange for Novices
That mentioned, USD worth motion would possibly stay underneath stress whereas the S&P 500-derived VIX Index, or fear-gauge, bleeds decrease. That is seeing {that a} decrease VIX suggests enhancing danger urge for food and waning demand for safe-haven currencies such because the US Greenback. Alternatively, if the VIX Index can defend its present stage right here across the 22-handle, which is its lowest stage since August, US Greenback bulls would possibly proceed to maintain the crucial help zone as properly.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
Be taught Extra – What’s Implied Volatility & Why Ought to Merchants Care?
EUR/USD, GBP/USD, and USD/JPY can be in focus throughout Wednesday’s buying and selling session contemplating the three main foreign money pairs comprise 57.6%, 11.9% and 13.6 of the DXY Index respectively. As such, the broader US Greenback will possible take route from its main counterparts. Although not included within the US Greenback Index, NZD/USD worth motion is likely to be one other notable FX pair to maintain on the radar contemplating it’s anticipated to be essentially the most lively main judging by its in a single day implied volatility studying of 11.4%.
Maintain Studying – USD/CAD Value Outlook: Canadian Greenback Climbs with Crude Oil
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception