Forex: US Dollar Shows Imminent Breakout Risk
We have seen Volatility measures trend towards multi-year lows for some time, but the threat of a rebound in risk aversion (troublesome for US equities but a boon to the safe haven dollar) has never felt imminent. That long-term risk is still there, but we have recently seen evidence of a more immediate risk spike in volatility and short-term burst for sentiment trends. With the uncertainty in the Fiscal Cliff and Euro-area crisis backing longer-term issues, we find direct contrast in the lowest activity read from the benchmark US Dollar Index in years. A breakout is inevitable. We discuss the fundamental factors that can help decide direction and shape momentum.
New to FX? Watch this Video
Sign up for John’s email distribution list, here
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.