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).
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