USD FORECAST: US DOLLAR EXTENDS BREAKOUT AS CURRENCY VOLATILITY RESURFACESUSD value motion has dominated the route of most major
USD FORECAST: US DOLLAR EXTENDS BREAKOUT AS CURRENCY VOLATILITY RESURFACES
- USD value motion has dominated the route of most major currency pairs because the US Dollar Index notches its strongest studying since April 2017
- FX volatility stays eerily low regardless of EUR/USD and AUD/USD breaking down to check multi-year technical obstacles
- Sparse technical resistance dealing with the DXY Index would possibly allow a chronic surge within the broader US Greenback
The US Greenback continues to ramp larger as demand for safe-haven currencies lingers. Danger-aversion permeating throughout the foreign exchange market is owed largely to ongoing angst that surrounds the novel coronavirus outbreak and its influence on the worldwide financial system.
Resilience of the US financial system – underpinned by strong nonfarm payrolls and shopper spending – has extensively contributed to power exhibited by the US Greenback. The Buck’s huge liquidity and positioning because the world’s reserve foreign money is probably going exacerbating the surge in USD value motion as nicely. I highlighted these basic drivers in a US Dollar forecast printed final Friday.
US DOLLAR INDEX – DXY PRICE CHART: WEEKLY TIME FRAME (DECEMBER 2016 TO FEBRUARY 2020)
Chart created by @RichDvorakFX with TradingView
Contemplating that the DXY Index is weighted overwhelmingly to EUR/USD efficiency, which has damaged all the way down to its weakest studying…