US DOLLAR, EUR/USD, DXY INDEX – TALKING POINTS:US Greenback draw back has accelerated over current buying and selling classesDXY
US DOLLAR, EUR/USD, DXY INDEX – TALKING POINTS:
- US Greenback draw back has accelerated over current buying and selling classes
- DXY Index probed 25-month lows earlier at the moment as promoting persists
- EUR/USD value motion stands out as a major driver of Greenback weak point
US Greenback bears have pummeled the Buck to its weakest stage since June 2018 measured by the DXY Index. On steadiness, the broader US Greenback now rests about 3.5% decrease year-to-date. This follows a nasty reversal from being up round 6.0% on the March swing excessive. USD promoting strain over current months seems to be largely owed to vanishing demand for safe-haven currencies and diverging trajectories for financial progress.
DXY INDEX & EUR/USD PRICE CHART: WEEKLY TIME FRAME (DEC 2017 TO JUL 2020)
Chart created by @RichDvorakFX with TradingView
Sharp declines lately recorded by the DXY Index appears fueled by EUR/USD efficiency particularly, although US Greenback weak point does seem far-felt throughout the board judging by the path of main forex pairs. Spot EUR/USD value motion – the biggest element of the US Greenback Index by far with a 57.6% weighting – has been on an absolute tear since mid-Could after a historic joint stimulus proposal gave the EU hope.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY & TRADING RANGES (1-WEEK)
Corresponding with the stretch of US Greenback draw back, which once more seems to be exacerbated by inflows into the Eurozone, the USD might be poised to give up its ‘King Greenback’ title, significantly if the standing bearish pattern retains steering the DXY Index decrease.
That stated, measures of anticipated forex volatility throughout key US Greenback FX pairs have ticked increased. An increase in implied volatility usually signifies that merchants have grown comparatively extra unsure, which tends to weigh negatively on urge for food for danger, and supply a optimistic tailwind to safe-havens just like the US Greenback.
Maybe this week’s financial calendar, jam-packed with high-profile fairness earnings, GDP studies, a FOMC determination, and newest spherical of congressional stimulus invoice talks simply to call a number of probably market-moving occasions, could present a catalyst with sufficient credence to immediate risk-aversion and probably stymie the Buck’s slide.
Maintain Studying – EUR/USD Extends Rally & USD/JPY Plunges on Markit PMIs
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception