US DOLLAR OUTLOOK: USD/CAD PRICE ACTION EYES BANK OF CANADA RATE DECISIONUS Greenback edged decrease throughout Tuesday’s buying
US DOLLAR OUTLOOK: USD/CAD PRICE ACTION EYES BANK OF CANADA RATE DECISION
- US Greenback edged decrease throughout Tuesday’s buying and selling session as current energy takes a pause
- The DXY Index is perched on the sting of short-term pattern assist amid firming yields
- USD/CAD implied volatility surges forward of the scheduled Financial institution of Canada charge determination
- Study extra about technical evaluation or implied volatility buying and selling methods
US Greenback bulls took a breather from their current rebound try on Tuesday. Remarks from Treasury Secretary nominee and former Fed Chair Janet Yellen appeared to have little influence on markets. Nonetheless, the DXY Index notched a -0.3% decline for the session as USD value motion weakened barely throughout the board of main forex pairs. the broader US Greenback drifted decrease to probe its 8-day easy transferring common, which roughly underpins the short-term bullish pattern fashioned by a string of upper highs and better lows since 07 January.
DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (24 SEP 2020 TO 19 JAN 2021)
Surging Treasury yields was pegged as a main catalyst driving the most recent bout of US Greenback energy. Though, with the yield on 10-year Treasuries beginning to stagnate round 110-basis factors, it seems momentum is fading behind the US Greenback reversal. That is highlighted by the MACD indicator and follows a rejection of the higher Bollinger Band.
That stated, defending the 8-day and 20-day easy transferring averages may recharge US Greenback bulls and encourage a push towards technical resistance close to the 38.2% Fibonacci retracement proven on the chart above. Alternatively, a breakdown under the 90.00-handle would possibly recommend the resumption of promoting strain throughout USD value motion that steers the broader US Greenback Index again towards year-to-date lows.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
Turning to US Greenback implied volatility readings, we see that USD/CAD value motion is predicted to be one of the energetic pairs throughout Wednesday’s buying and selling session. In actual fact, USD/CAD in a single day implied volatility simply jumped to eight.2%, which is above its 20-day common studying of 6.7% and ranks within the prime 70th percentile of readings over the past 12-months. This anticipated acceleration in USD/CAD volatility is probably going as a result of upcoming Financial institution of Canada rate of interest determination scheduled for Wednesday, 20 January 2021 at 15:00 GMT.
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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