US DOLLAR OUTLOOK: DXY INDEX PARES GEINS OF FED SYMPOSIUM
- US dollar price activity has generally weakened in recent trading sessions
- DXY index fell -0.9% from last Friday’s high rise as bears lose recent strength
- The Foundation’s narrow talk at the Jackson Hole Symposium poses a significant risk of volatility
The US dollar bears have been in the driver’s seat, driving the broader DXY index down almost -1.0% since Friday. This appears to be due to deteriorating economic data and global growth prospects, which may be sufficient for the Federal Reserve to delay announcing a timetable for reducing asset purchases.
As markets have stepped back from expectations that the Fed could use its annual Jackson Hole Symposium as a platform to describe what the narrowing schedule looks like, it’s no surprise that the U.S. dollar has diminished recent gains. Broad sales pressure USD price measures could continue if FOMC Due to the COVID-19 delta option and its potential, officials are cautious in their guidance.
DXY – US DOLLAR INDEX PRICE CARD: DAILY FRAME (MAY 13 – August 25, 2021)
This means that the recent withdrawal of the US dollar leaves the DXY index at an interesting level of technical support, leading to the risk of events in Jackson Hole. The DXY index is currently trading at around 92.80, supported by around 20-day simple moving average and last bullish leg of Fibonacci retracement level of 23.6%. The rising trend line connecting the swings of June 9 and August 4 also highlights its potential buoyancy.
However, due to the accelerating pace of decline and the broader weakening of the US dollar over the last four consecutive trading sessions, the MACD has declined. This suggests that the US dollar is vulnerable to prolonged reversals and may in turn see US dollar bears targeting the lower Bollinger strip. On the other hand, if the Fed deviates from the markets with Jackson Hole’s restrictive announcement, an influx of US dollar strength is likely to come in, bringing the previous year’s highs back into focus.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RADGES (NIGHT)
As such, the US dollar expected volatility The readings are marked above to reflect the risk of events surrounding the Jackson Hole Symposium on Thursday, August 26th. Traders are likely to be on the edge of their seats, trying to assess FOMC officials such as St. James Bullard, President of the Federation of Louis, and Robert Kaplan, President of the Federation of Dallas, relatively tomorrow or terrible thinness, who will have to speak tomorrow. However, it may be more sensible to wait for a comment from Federal Reserve Chairman Powell in a speech to the economic outlook on Friday, August 27, at 2:00 PM GMT, before committing to a longer-term target for the US dollar.
Continue reading – Gold price outlook: XAU / USD pegged to the Fed Symposium Risk
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