US DOLLAR EYES STOCK MARKET EARNINGS SEASON ON DECK, VIX ‘FEAR-GAUGE’ IN FOCUSUS Greenback Index begins the buying and selling we
US DOLLAR EYES STOCK MARKET EARNINGS SEASON ON DECK, VIX ‘FEAR-GAUGE’ IN FOCUS
- US Greenback Index begins the buying and selling week on its again foot as EUR/USD advances
- S&P 500 VIX ‘fear-gauge’ spiked Monday afternoon as shares pivoted sharply decrease
- USD value motion would possibly rebound additional if fairness earnings encourage risk-aversion
The US Greenback is buying and selling softer on steadiness to start out the week judging by DXY Index efficiency. US Greenback draw back appears remoted to EUR/USD value motion, which is the biggest part of the DXY Index and largest driver of its route.
Really helpful by Wealthy Dvorak
Foreign exchange for Freshmen
Specializing in different main forex pairs – like GBP/USD, USD/JPY, or AUD/USD – reveals that the US Greenback truly strengthened extra broadly. Assist to the US Greenback seemingly corresponded with a day reversal within the S&P 500 as shares turned pink in response to discouraging coronavirus headlines.
DXY INDEX – US DOLLAR PRICE CHART: 2-HOUR TIME FRAME (26 JUN TO 13 JUL 2020)
Chart created by @RichDvorakFX with TradingView
As new virus instances explode, the pattern in coronavirus-related hospitalizations and deaths have began to reaccelerate. This has enticed extra Apple retailer closures and pushed native governments to backtrack on reopening pointers. Most lately, the 2 largest public college districts in California introduced that it’ll hold its training amenities closed this Fall because the coronavirus pandemic persists.
Really helpful by Wealthy Dvorak
Introduction to Foreign exchange Information Buying and selling
This apprehension of a ‘return to regular’ conveyed by politicians and massive companies amid COVID-19 threatens to weigh negatively on financial progress expectations, which is already being mirrored by the S&P 500 VIX Index. The VIX Index, or fear-gauge, surged after the most recent coronavirus information crossed the wires and will point out a day of reckoning lurks on the horizon.
DXY INDEX – US DOLLAR PRICE CHART: DAILY TIME FRAME (09 APR TO 13 JUL 2020)
Chart created by @RichDvorakFX with TradingView
That mentioned, potential for a bigger US Greenback reversal again increased appears noteworthy. This bullish USD situation would possibly garner added gravity if market sentiment deteriorates additional and the VIX Index continues to climb.
Really helpful by Wealthy Dvorak
Get Your Free USD Forecast
Along with lingering coronavirus considerations, the highly-anticipated kickoff of S&P 500 earnings releases on deck this week is one other main market theme value retaining shut tabs on. That is contemplating inventory market earnings can have a cloth influence on investor threat urge for food and drive demand for safe-haven property just like the USD.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (1-WEEK)
Final however not least, world macro occasion threat detailed on the DailyFX Financial Calendar for this week highlights potential catalysts for forex volatility. Implied FX volatility measurements taken on Friday’s shut appear significantly low in mild of S&P 500 earnings, central financial institution choices from the BOC and ECB, in addition to Australian employment and US retail gross sales information due. If these elementary drivers worsen market sentiment, it may trigger a crunch on liquidity and tighten monetary situations, which might doubtless present a lift to the broader US Greenback in flip.
Learn Extra – EUR/USD & AUD/USD in Focus Forward of ECB, Jobs & Retail Gross sales
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception