US DOLLAR, GOLD, CRUDE OIL PRICE OUTLOOK: MARKET VOLATILITY ON THE RISE AS RISK APPETITE FIZZLES OUTMarket volatility appears rek
US DOLLAR, GOLD, CRUDE OIL PRICE OUTLOOK: MARKET VOLATILITY ON THE RISE AS RISK APPETITE FIZZLES OUT
Market volatility appears rekindled because the VIX soars and shares drop sharply. Climbing measures of cross-asset volatility spotlight how dealer sentiment has began to indicate indicators of decay. This follows the most recent FOMC announcement, which was accompanied by a cautious tone from Fed Chair Powell, notably when the central financial institution head mentioned the chance that the labor drive possible faces lasting structural injury amid 20-plus million People unemployed abruptly.
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Urge for food for danger has additionally softened significantly alongside a re-acceleration within the pattern of latest coronavirus instances and hospitalizations. If sustained, governments may threaten to impose strict lockdown measures once more and client confidence may collapse once more. These current developments have introduced bullish tailwinds to well-liked safe-haven property – just like the US Greenback.
VIX INDEX & US DOLLAR PRICE CHART: 1-HOUR TIME FRAME (29 MAY TO 12 JUN 2020)
Chart created by @RichDvorakFX with TradingView
The US Greenback has ricocheted increased by about 1.5% during the last two buying and selling classes. As indicated by the DXY Index, US Greenback value motion has rebounded broadly and follows skyrocketing measures of volatility such because the VIX Index. The US Greenback reversal increased may acquire tempo if danger aversion intensifies and forex volatility continues to climb.
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VIX INDEX & GOLD PRICE CHART: 1-HOUR TIME FRAME (29 MAY TO 12 JUN 2020)
Chart created by @RichDvorakFX with TradingView
Gold costs have equally loved the most recent return of danger aversion. The valuable metallic additionally possible advantages from central financial institution rate of interest outlook anchored to zero for the foreseeable future. Cracking market sentiment and hovering cross-asset volatility may steer traders towards bullion and assist bolster the value gold.
| Change in | Longs | Shorts | OI |
| Every day | 0% | 5% | 2% |
| Weekly | -18% | 35% | -6% |
VIX INDEX & CRUDE OIL PRICE CHART: 1-HOUR TIME FRAME (29 MAY TO 12 JUN 2020)
Chart created by @RichDvorakFX with TradingView
Crude oil value motion has crumbled almost 10% for the reason that commodity hit resistance the 40.00-handle earlier this week. The worth of crude oil, which is usually delicate to danger sentiment and international GDP development expectations, tends to carry an inverse relationship with market volatility.
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Correspondingly, crude oil bulls have struggled to keep up a bid beneath the pro-risk commodity. The route of crude oil may proceed mirror the VIX ‘fear-gauge’ and supply a bellwether for safe-haven demand in flip.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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