US DOLLAR OUTLOOK: USD PRICE ACTION MIXED AS VOLATILITY CURTAILSUSD value motion was a blended bag for many of Monday’s buying an
US DOLLAR OUTLOOK: USD PRICE ACTION MIXED AS VOLATILITY CURTAILS
- USD value motion was a blended bag for many of Monday’s buying and selling session
- US Greenback superior on steadiness largely owing to Pound Sterling weak point
- Implied volatility readings have cooled off throughout the main foreign money pairs
The US Greenback traded blended on Monday. US Greenback power stemmed primarily from a 110-pip pullback by GDP/USD value motion, however this was offset as a consequence of a 27-pip advance by EUR/USD. On steadiness, the broad-based DXY Index gained 0.1% and reclaimed its short-term 8-day easy shifting common.
| Change in | Longs | Shorts | OI |
| Every day | 8% | -3% | 3% |
| Weekly | 33% | 3% | 17% |
DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (13 AUG TO 28 DEC 2020)
Chart by @RichDvorakFX created utilizing TradingView
Constructive divergence highlighted by the MACD indicator probably serves as a constructive technical improvement for US Greenback bulls. This follows the DXY Index recoiling larger off its decrease Bollinger Band mid-December. The Bollinger Band width is shrinking, nevertheless, and may recommend that latest exercise is a mere consolidation inside the broader bearish development underpinned by the 20-day easy shifting common.
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USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
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Additionally, it’s value noting how year-end rebalancing and muted liquidity because of the holidays could possibly be distorting latest USD value motion. FX actions are anticipated to stay comparatively tame judging by the newest in a single day US Greenback implied volatility readings. These measurements have largely began cooling off with key basic catalysts like Brexit and monetary help talks drifting into the rearview mirror.
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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