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USD Price Outlook: US Dollar Awaits Powell Speech at Jackson Hole

USD Price Outlook: US Dollar Awaits Powell Speech at Jackson Hole

Rich Dvorak, Analyst

US DOLLAR OUTLOOK: USD PRICE HINGES ON UPCOMING FED CHAIR POWELL SPEECH AT JACKSON HOLE SYMPOSIUM

  • US Dollar dropped over the last two trading sessions as bulls struggle to sustain a bid
  • The DXY Index has largely drifted sideways so far this month within a broad range
  • USD price action turns to a speech from Fed Chair Powell at the Jackson Hole Symposium

The Greenback has officially surrendered its post-PMI data gains with the US Dollar Index dropping back below the 93.00-price level. USD price action has faced renewed selling pressure over the last two trading sessions as the short-term relief bounce finds conflict with a broader bearish trend underpinned by the string of lower highs notched last month.

US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (05 JUN TO 26 AUG 2020)

US Dollar Index Price Chart Jackson Hole Symposium

Chart created by @RichDvorakFX with TradingView

US Dollar turbulence this month, however, seems to have defined a rough trading range between key barriers of technical support and resistance. The DXY Index is currently hovering around the mid-point of this range and also gravitating around its 8-day moving average. This comes as FX traders anxiously await an upcoming speech from Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium scheduled for tomorrow, August 27.

USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)

USD price chart US Dollar outlook Fed Chair Powell Speech Jackson Hole Symposium August 2020

Uncertainty surrounding potential tweaks to Fed monetary policy – such as speculation around changes to how the central bank gauges inflation benchmarks or manages interest rate targets – could fuel market volatility. This is highlighted by the latest 24-hour US Dollar implied volatility readings just pulled for Thursday’s trading session.

Overnight USD implied volatility readings are running red-hot when compared to measurements taken over the last 12-months and are also notably higher than 20-day averages across the major currency pairs. Options-implied trading ranges are calculated using 1-standard deviation (i.e. 68% statistical probability price action is contained within the implied trading range over the specified time frame).

-- Written by Rich Dvorak, 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.

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