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US Dollar Daily Volatility Report: EUR/USD & USD/CAD Eye Jobs Data

US Dollar Daily Volatility Report: EUR/USD & USD/CAD Eye Jobs Data

2019-09-05 22:03:00
Rich Dvorak, Junior Analyst
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US DOLLAR CURRENCY VOLATILITY: USD PRICE ACTION EYES AUGUST JOBS REPORT

  • EURUSD currency volatility takes the spotlight with the August US Jobs Report slated for release Friday at 12:30 GMT
  • US Dollar price action could be headed for a bullish reversal which might be sparked by another robust NFP data print
  • Check out this week’s US Dollar Technical Forecast for additional USD price outlook

US Dollar price action over the last 24-hours has gyrated and left the DXY Index – a popular basket of major USD currency pairs – roughly unchanged. Looking at the charts, however, the DXY Index appears to have printed a dragonfly doji, which is a candlestick pattern that can indicate a technical reversal may lurk ahead.

US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (MARCH 28, 2019 TO SEPTEMBER 05, 2019)

DXY Index Price Chart US Dollar Technical Analysis

Chart created by @RichDvorakFX with TradingView

News that the US and China have scheduled trade talks for October drove traders to reassess the extent that the Federal Reserve will provide accommodative monetary policy. Fed rate cut bets were unwound further during Thursday’s trading session following better-than-expected August US services PMI numbers which helped bolster the US Dollar. That said, another solid data print on the US economy with tomorrow’s release of August NFP figures remains an upside risk for the greenback.

US DOLLAR OVERNIGHT IMPLIED VOLATILITY & TRADING RANGES

US Dollar Currency Volatility and Implied Trading Ranges Chart

With the August US Jobs report on deck, forex traders should expect heightened EURUSD price action considering the monthly NFP jobs data release typically sparks forex volatility. In fact, spot EURUSD fluctuates +/- 36 pips on average in response to monthly US nonfarm payrolls employment data, which compares to +/- 4 pips on average otherwise. That said, EURUSD overnight implied volatility of 6.0% and implied move of +/- 35 pips is right in line with historical averages.

Across the board of US Dollar currency pairs, the significant drop in currency volatility owing to the latest influx of US-China trade war optimism is also noteworthy. Additionally, spot USDCAD may be of particular interest throughout Friday trade considering its overnight implied volatility reading is in the top 80th percentile in light of Canada jobs data that will also be reported.

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

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

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