US DOLLAR OUTLOOK: AUD/USD PRICE ACTION EXTENDS HIGHER, USD/CAD DECLINES WITH GEORGIA SENATE RUNOFF ELECITON IN FOCUSUS Greenback
US DOLLAR OUTLOOK: AUD/USD PRICE ACTION EXTENDS HIGHER, USD/CAD DECLINES WITH GEORGIA SENATE RUNOFF ELECITON IN FOCUS
- US Greenback weakened decisively on Tuesday to commerce again at mutli-year lows towards key friends
- AUD/USD value motion surged whereas USD/CAD edged decrease alongside enhancing threat urge for food
- Georgia senate runoff race entrance and middle as a possible catalyst for US Greenback volatility
- Study extra about analyzing forex volatility and implied volatility buying and selling methods
The US Greenback pivoted decrease on Tuesday and reversed the intraday rebound staged throughout the prior buying and selling session. US Greenback weak spot was witnessed throughout the board of main forex pairs. AUD/USD value motion superior sharply as dealer threat urge for food recovered and USD/CAD tumbled with the assistance of surging crude oil costs. Usually talking, the Aussie-Greenback is carefully linked to market sentiment whereas the Canadian Greenback tends to trace the course of crude oil.
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DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (15 SEP 2020 TO 05 JAN 2021)
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Maybe dealer hypothesis on Georgia senate runoff election outcomes contributed to US Greenback extra broadly. Potential for a democratic sweep may be weighing negatively on the US Greenback seeing that this could possible correspond with a cloth improve within the anticipated dimension of future fiscal stimulus packages. As such, promoting stress throughout USD value motion might speed up if democrats take management of the senate by successful two seats within the Georgia election runoff. However, the broader US Greenback would possibly catch a reduction bounce if senate republicans preserve their majority.
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USD PRICE OUTLOOK: US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
In gentle of this evident uncertainty, it comes as little shock in a single day US Greenback implied volatility readings are operating red-hot. Apart from the senate runoff race, politicians are anticipated to vote to certify state outcomes from the presidential election and clear a closing hurdle for a clean transition of energy from Trump to Biden. Markets and dealer threat urge for food might additionally gyrate with covid considerations.
If the specter of intensifying lockdowns and restrictions positive aspects traction, it will possible trigger sentiment to deteriorate broadly, which could gas a bid beneath the safe-haven US Greenback in flip. Moreover, the discharge of FOMC minutes from the December Fed assembly is scheduled to cross the wires throughout Wednesday’s buying and selling session as effectively.
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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