US DOLLAR OUTLOOK: DXY INDEX EYES 200-DAY MOVING AVERAGE, FX VOLATILITY TO ACCELERATE
- US Greenback edged broadly decrease on Monday and pressured the DXY Index towards its 200-DMA
- AUD/USD worth motion is anticipated to speed up owing to occasion threat posed by the RBA determination
- Sharpen your technical evaluation expertise or be taught extra about implied volatility buying and selling methods
US Greenback bulls have had a tough begin to 2Q-2021. The broader DXY Index is already down -0.7% to commerce again close to the 92.50-price degree as US Greenback shopping for stress begins to dissipate. Fading US Greenback energy has helped EUR/USD and GBP/USD worth motion snap increased. Different main forex pairs like USD/JPY and USD/CAD have equally capitalized on a softer US Greenback.
| Change in | Longs | Shorts | OI |
| Day by day | -3% | 6% | 1% |
| Weekly | -11% | -3% | -7% |
Curiously, the Dollar has confronted headwinds over the previous couple of periods regardless of red-hot financial knowledge, like nonfarm payrolls surging 916Ok or the ISM Providers PMI hitting its highest studying on document. To not point out, Eurodollar futures have now priced in a full price hike from the Federal Reserve by December 2022. This might present US Greenback bulls with a possibility to fade latest weak point – significantly if the total return of market liquidity following Good Friday and Easter ushers alongside the prevailing uptrend.
DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (04 DEC 2020 TO 05 APR 2021)
Chart by @RichDvorakFX created utilizing TradingView
US Greenback bulls may look to defend this technical assist zone across the 92.50-price degree, which is highlighted by the ascending trendline200-day easy shifting common. This potential space of buoyancy can also be underpinned by prior resistance-turned-support from the 09 March swing excessive. Rebound efforts would possibly see the higher Bollinger Band drift into focus. If a deeper push by US Greenback bears materializes, nonetheless, the 91.00-handle may come again into play.
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USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
That mentioned, forex volatility is anticipated to speed up into Tuesday’s buying and selling session judging by in a single day US Greenback implied volatility readings. Not solely have in a single day implied volatility readings ticked broadly increased following the vacation lull, additionally they commerce above their respective 20-day averages for probably the most half. AUD/USD worth motion is anticipated to be one of the vital lively majors on Tuesday with an in a single day implied volatility studying of 11.6%. Potential for elevated Aussie-Greenback volatility possible coincides with occasion threat posed by the upcoming RBA price determination due for launch 06 April at 4:30 GMT.
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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