US DOLLAR OUTLOOK: DXY INDEX EXTENDS ADVANCE AS USD PRICE ACTION STAYS STRONGThe US Greenback is on tempo to place in one other r
US DOLLAR OUTLOOK: DXY INDEX EXTENDS ADVANCE AS USD PRICE ACTION STAYS STRONG
- The US Greenback is on tempo to place in one other robust session as Treasury yields pivot greater
- DXY Index climbs to contemporary four-month highs and trades comfortably above its 200-DMA
- Enhance your technical evaluation or study implied volatility buying and selling methods!
US Greenback bulls are ratcheting the Buck broadly greater headed into Tuesday’s shut. The DXY Index is on tempo for a 0.35% achieve to commerce across the 93.25-price degree and contemporary four-month highs. US Greenback energy has been felt throughout the board of FX friends. EUR/USD shed one other 40-pips on the day, for instance, whereas USD/JPY spiked above the 110.00-price degree. These two main forex pairs are the biggest parts of the DXY Index with weightings of 57.6% and 13.6%, respectively. Information movement was moderately muted all through the session, although sturdy shopper confidence knowledge launched this morning doubtless reinforces the US outperformance narrative.
DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (09 SEP 2020 TO 30 MAR 2021)
Chart by @RichDvorakFX created utilizing TradingView
From a technical perspective, US Greenback bulls look clearly in charge of route. Resistance posed by the 200-day easy transferring common, in addition to the 23.6% Fibonacci retracement final yr’s buying and selling vary, proved to be feeble obstacles. Upward momentum propelling the US Greenback continues to speed up judging by the MACD indicator.
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This brings to focus the 03 November swing excessive into focus as the following potential technical resistance degree. Though, it’s price noting that the broader DXY Index is beginning to look somewhat prolonged with the relative energy index flirting with overbought territory. The higher Bollinger Band additionally seems to be preserving US Greenback upside comparatively contained. A push by US Greenback bears would possibly look to check prior resistance-turned-support posed by the 08 March excessive.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
US Greenback in a single day implied volatility readings present that USD/JPY worth motion is anticipated to be probably the most energetic headed into Wednesday’s buying and selling session. That is judging by USD/JPY in a single day implied volatility of seven.5%, which compares to its 20-day common studying of 6.0% and ranks within the high 84th percentile of measurements taken during the last 12-months. US President Joe Biden is on deck to announce part-one of his infrastructure bundle tomorrow and can doubtless steal the limelight for occasion danger. Month-end and quarter-end rebalancing flows would possibly weigh on the route of the US Greenback as effectively.
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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