US DOLLAR OUTLOOK: USD PRICE ACTION TO HEAT UP WITH INFLATION DATA DUE
The US Greenback will doubtless be entrance and middle throughout Wednesday’s buying and selling session. That is contemplating potential for US Greenback volatility to speed up in response to month-to-month inflation information on deck for launch. The DailyFX Economic Calendar particulars that markets expect headline and core inflation to cross the wires at 3.6% and a couple of.3%, respectively. A fabric upside shock on inflation may intensify the Fed taper debate, which might doubtless correspond a pointy transfer increased in Treasury yields and the broader US Greenback. Alternatively, a comparatively comfortable or in-line studying on inflation may be seen as a disappointment and trigger merchants to unwind bets for a less-dovish FOMC.
DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (24 DEC 2020 TO 11 MAY 2021)
Looking at a each day chart of the DXY Index, we see that the US Greenback has weakened significantly over latest buying and selling periods. This has pushed the DXY Index right down to its lowest stage in 11-weeks close to the 90.15-price stage. US Greenback bulls appear to have stemmed the bleed right here, which is an space of confluent help underpinned by the 78.6% Fibonacci retracement of the DXY’s year-to-date buying and selling vary. A resumption of US Greenback promoting stress may tee up a have a look at the 25 February swing low earlier than early January lows are eyed. If a rebound begins to materialize, nonetheless, the US Greenback may see a rally towards its 100-day easy moving average.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
AUD/USD value motion is anticipated to be essentially the most lively on Wednesday throughout the board of key US Greenback forex pairs. That is judging by AUD/USD in a single day implied volatility of 12.2%, which compares to its 20-day common of 8.5% and ranks within the prime 82nd percentile of readings taken over the past 12-months. USD/JPY value motion may additionally be value maintaining on the radar seeing that the Greenback-Yen is especially delicate to adjustments in rates of interest and inflation expectations.
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