The Dollar Index is taking advantage of the good support of the 50-day moving average with a rebound and also trying again to assault 90 (top of March 2009). There are still strident differences between oscillators and prices that pose some questions on the possible future success of the important resistance of 90, but obviously a bullish tear should be a strength test of the US dollar to be reckoned with.
But this week we want to focus on the volatility of the Forex, synthesized by the Deutsche Bank Fx Volatility Index). As we can see in the graph, the volatility has dropped to the lowest levels from 2007 to July 2014, before taking off with a substantial doubling in value in the last fiery sessions. In fact, we are facing a bullish break of a volatility tendency to compression that was going on since 2009. Just a change at 30 weeks of + 50% and the approach of the historical average of 10%, act as a watershed for the future scenario. In 2011 and 2013, we witnessed some similar flare-ups that did not produce other effects, while in 2007 the demolition of the down trend line and the simultaneous overcoming of 10 caused a disorderly currency movement that we all memory. Indicator to be followed especially for the possible effects of commodities and emerging currencies (graphic source: Metastock and Bloomberg).
But this week we want to focus on the volatility of the Forex, synthesized by the Deutsche Bank Fx Volatility Index). As we can see in the graph, the volatility has dropped to the lowest levels from 2007 to July 2014, before taking off with a substantial doubling in value in the last fiery sessions. In fact, we are facing a bullish break of a volatility tendency to compression that was going on since 2009. Just a change at 30 weeks of + 50% and the approach of the historical average of 10%, act as a watershed for the future scenario. In 2011 and 2013, we witnessed some similar flare-ups that did not produce other effects, while in 2007 the demolition of the down trend line and the simultaneous overcoming of 10 caused a disorderly currency movement that we all memory. Indicator to be followed especially for the possible effects of commodities and emerging currencies (graphic source: Metastock and Bloomberg).
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold clings to strong daily gains above $2,380
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.