US DOLLAR OUTLOOK: USD REVERSAL GAINS TRACTION, EYES ON JACKSON HOLE SYMPOSIUM
- US Dollar has rocketed higher throughout Monday’s trading session and erased early losses
- The DXY Index is developing a fresh bullish trend in a reversal attempt off two-year lows
- USD price action eyes the Federal Reserve Jackson Hole Symposium for potential volatility
The US Dollar has weathered a turbulent trading session so far today as USD price action whipsaws once more with bulls and bears battling over the Greenback’s next direction. This had the DXY Index down by about 0.3% prior to the New York opening bell, but the broader US Dollar is now on pace to close the day in positive territory.
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DXY INDEX – US DOLLAR PRICE CHART: 1-HOUR TIME FRAME (13 AUG TO 24 AUG 2020)
Chart created by @RichDvorakFX with TradingView
US Dollar bulls likely welcome the intraday reversal as USD price action shows signs of follow-through from Friday’s influx of strength sparked by PMI data. This afternoon’s bid enjoyed by the DXY Index also looks to underscore a short-term bullish trend developing from a string of higher lows.
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USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (1-WEEK)
Currency volatility is expected to continue its decline judging by one-week US Dollar implied volatility readings clocked at the close last Friday. Sustained volatility suppression stands out as a potential headwind that could linger and weigh negatively on the US Dollar. Broadly speaking, this is because the absence of volatility facilitates risk appetite and steers FX traders away from top safe-haven currencies such as the Greenback.
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USD price action nevertheless faces considerable event risk that could catalyze market volatility in the days to come. This is apparent when taking a look at the DailyFX Economic Calendar as it details several high-impact data releases and scheduled events this week. The annual Jackson Hole Symposium coordinated by the Federal Reserve stands out in particular, which is set to stream online on this Thursday, August 27 and Friday, August 28.
Keep Reading: US Dollar Decline May Accelerate After Jackson Hole Symposium
-- Written by Rich Dvorak, Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
