News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bearish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Multiple time frame analysis follows a top down approach when trading and allows traders to gauge the longer-term trend while spotting ideal entries on a smaller time frame chart. Learn how to incorporate multiple time frame analysis here: https://t.co/Sy3g6HGLrR https://t.co/aRfVCRZut3
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrXkcYz https://t.co/uUh18lR3yK
  • The rising wedge is a popular reversal pattern that is predictive in nature and can give traders a clue to the direction and distance of the next price move. Incorporate the rising wedge in your trading strategy and learn more here: https://t.co/zTTk2WOrj9 https://t.co/q5oBalZieU
  • Both the S&P 500 and $EURUSD will enter the coming week with momentum to their back. What can trip up the rallies? What could keep them going? My overview for the week ahead: https://www.dailyfx.com/forex/video/daily_news_report/2020/12/05/SP-500-and-EURUSD-Rallies-Face-Different-Conviction-Questions-.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/YfEXEhkbhl
  • After the recent strength of EUR/USD, a period of consolidation is likely ahead of two critical meetings: of the European Central Bank and the European Council. Get your $EURUSD market update from @MartinSEssex here:https://t.co/Slu7tHo2a4 https://t.co/9am4szeia1
  • Triangle patterns have three main variations and appear frequently in the forex market. These patterns provide traders with greater insight into future price movement and the possible resumption of the current trend. Learn about triangles here: https://t.co/ZukLITx2KG https://t.co/gvkXqKDQyH
  • Continuation patterns can present favorable entry levels to trade in the direction of the prevailing trend. Use continuation patterns in your technical analysis here: https://t.co/TUVnO3bO1P https://t.co/vBLkMKjf4x
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/n8vpmuLdTW
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/CZePv1JEFh
  • The US dollar is unloved, oversold and at lows last seen over 30-months ago. At the moment there seems to be very little reason to buy the greenback. Get your $USD market update from @nickcawley1 here:https://t.co/VY3SLs35cp https://t.co/AVpY2GkGUG
US Dollar Price Volatility Report: IMF GDP Outlook & Fed Cut Odds

US Dollar Price Volatility Report: IMF GDP Outlook & Fed Cut Odds

2019-10-14 21:46:00
Rich Dvorak, Analyst
Share:

US DOLLAR CURRENCY VOLATILITY EYES IMF WORLD ECONOMIC OUTLOOK & FED RATE CUT ODDS

  • The US Dollar was able to stage a rebound to start the week as the greenback catches bid at its 50-day simple moving average
  • USD price action stands to swing in response to the latest update on the IMF”s global growth outlook as well as changes to FOMC rate cut bets following last week’s trade talks
  • For comprehensive fundamental and technical insight on the US Dollar, download our free 4Q-2019 Forecasts and Trading Guides

The US Dollar is starting the week on its front foot with the world’s reserve currency attempting to recover recent downside. USD price action has potential to further extend its rebound considering the IMF’s World Economic Outlook update is slated for release early Tuesday. This is due to expectations for the IMF to slash its global GDP growth outlook once again, which could spur demand for safe haven currencies like the US Dollar.

I noted this past July when the most recent IMF World Economic Outlook report was published that the US Dollar could rise in response to sluggish GDP growth estimates. The DXY Index – a popular basket of major US Dollar currency pairs – has climbed well over 1% since then.

US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (APRIL 17, 2019 TO OCTOBER 14, 2019)

US Dollar Index Price Chart Technical Analysis

Chart created by @RichDvorakFX with TradingView

USD price action found buoyancy at its 50-day simple moving average, which I mentioned was a strong possibility in Friday’s US Dollar price volatility report. US Dollar bulls will likely continue to look to this technical indicator to keep the greenback afloat going forward. Below this area, the 38.2% Fibonacci retracement level of the US Dollar’s trading range since late June comes into focus.

Conversely, confluent resistance posed by the 23.6% Fib and 20-day simple moving average could stymie a rebound in the US Dollar.

Check out this US Dollar Technical Forecast: EUR/USD, GBP/USD, AUD/USD, USD/CAD.

FED INTEREST RATE CHANGE PROBABILITIES (OCTOBER 2019)

FOMC Interest Rate Cut Expectations Price Chart October 2019

According to the latest overnight swaps pricing, rate traders are expecting a 70.8% probability that the Federal Reserve cuts interest rates later this month. This compares to the 82.2% probability priced in by markets early last week. With the US-China trade war taking a turn for the better following last Friday’s phase 1 trade agreement supposedly reached, the Fed could have more wiggle room to be patient with future monetary policy decisions rather than cut rates aggressively to insure against downside risks. In turn, the US Dollar could be provided with a strong tailwind if Fed rate cut expectations recede further in response to this development.

US DOLLAR IMPLIED VOLATILITY & TRADING RANGES (OVERNIGHT)

US Dollar Implied Volatility Trading Ranges

GBPUSD is expected to be the most volatile major US Dollar currency pair during Tuesday’s trading session with an overnight implied volatility of 17.2% with the latest Brexit developments front and center. On balance, overnight US Dollar implied volatility is roughly in line with recent readings judging by 20-day averages and 12-month percentile rankings across the major USD currency pairs. The DailyFX Economic Calendar lists high-impact economic data releases and event risk on deck, which typically serve as fundamental catalysts that spark currency volatility.

US DOLLAR RISK REVERSALS (OVERNIGHT)

US Dollar Risk Reversal

A risk reversal reading above zero indicates that the demand for call option volatility (upside protection) exceeds that of put option volatility (downside protection). For additional insight on market positioning and bullish or bearish biases, traders can turn to the IG Client Sentiment data, which is updated in real-time and covers several currency pairs, commodities, and equity indices.

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES