US DOLLAR FORECAST: USD PRICE ACTION STRENGTHENS, VIX INDEX CLIMBS POST-FED DECISION POWELL PRESSER
- US Dollar gains belligerent following a latest FOMC preference and Fed Chair Powell presser
- SP 500 VIX Index edges aloft as risk hatred takes reason and sends bonds shifting lower
- GBP/USD cost movement gives behind gains while a Aussie-Dollar drops into disastrous territory
The US Dollar looks to finish Wednesday’s trade event aloft in a arise of a September 2020 FOMC decision. USD cost movement has been on a roller-coaster float over a final 24-hours with a Greenback gyrating and causing major banking pairs to whipsaw. The US Dollar strengthened broadly during a Asia event open though fast surrendered those gains trade progressed. As a scheduled Fed proclamation approached, however, a DXY Index formed around a 92.80-price level.
US DOLLAR PRICE CHART VIX INDEX OVERLAID: 5-MINUTE TIME FRAME (16 SEP 2020 INTRADAY)
This area of technical support was highlighted in a Fed assembly preview published yesterday. We also remarkable intensity for a US Dollar to lane a instruction of a VIX Index, or fear-gauge, as marketplace participants eaten latest commentary from a Federal Reserve. Perhaps upgraded mercantile projections for US GDP, unemployment, and acceleration supposing by FOMC officials helped boost a Dollar relations to other FX peers.
Commentary from Fed Chair Powell during a follow-up press discussion might have exacerbated a bid underpinning USD cost movement into a close. The authority remarkable that while mercantile activity has picked adult in new months, alleviation opposite high-frequency indicators have softened. For instance, Powell settled how some measures of consumer spending and pursuit expansion have slowed given mid-June.
The Federal Reserve approaching unhappy dovish expectations with remarks emphasizing a executive bank is ‘closely monitoring a situation’ rather than doing some-more now. Fed Chair Powell also shied divided from some-more financial support during this time as mercantile process efforts approaching stands to improved assistance a economy lapse to levels prevalent before a pestilence hit. Nevertheless, a Fed conveyed a vigilant to continue a gait of item purchases during slightest during a stream pace.
GBP/USD PRICE CHART: 1-HOUR TIME FRAME (09 SEP TO 16 SEP 2020)
GBP/USD is still in certain domain on a day, though a wire has been gnawing neatly lower, down about 43-pips, after a rejecting during a 1.3000-price level. The Pound-Dollar has intensity to continue a decrease from intraday highs and maybe proceed trend support nearby a 1.2900-handle. Breaching this technical support section could open adult a doorway for a retest of month-to-date lows amid building Brexit uncertainty.
AUD/USD PRICE CHART: DAILY TIME FRAME (27 MAY TO 16 SEP 2020)
AUD/USD cost movement also gravitated reduce from event highs on a behind of a Sep Fed matter and press discussion hold by Chair Powell. The pro-risk Aussie approaching succumbed to offered vigour opposite a US Dollar reflection as marketplace view run-down and caused an boost in direct for safe-haven currencies, like a USD. Spot AUD/USD prices could corner behind toward a 0.7200-handle, that is roughly underscored by a 50-day moving average, if risk hatred is postulated and approaching sensitivity continues to increase.
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