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18 Jun 2013
US Dollar Index advances remain capped near 81.00
FXstreet.com (Barcelona) - After trading as high as 81.06 early in the session, the DXY was unable to maintain a firm bid at higher prices and leaked lower later in the day to finish flat at 80.81.
FOMC meeting to heighten DXY volatility
Although the DXY has suffered steep declines of nearly 4.43% since the last week of May, Christopher Vecchio, Currency Analyst at Daily FX believes further downside may be limited as we head into the FOMC meeting. “The Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is working on its second consecutive Inside Day today, and only its fourth positive day over the past fourteen, as investors have hit the brakes on recent volatility ahead of the Federal Reserve’s June policy meeting this Wednesday, added Vecchio.
In further summing up his thoughts Vecchio commented, “Overall, however, there’s a certain “calm before the storm” feeling afoot right now, and the JPMorgan Global FX Volatility Index has plummeted by -9.80% from its yearly high set on Thursday, confirming the downswing in short-term fear. Nevertheless, FX volatility measures have been elevated near their highest level since June 2012.” In conclusion, Vecchio went on to say he believes the US Dollar will be forming a bottom soon after the Fed Rate Decision.
Current technical set up still not confirming a bottom
David Solin of FXA went on discuss a few technical developments on the DXY charts that may help influence direction as we progress through the week. “Broader US$ is consolidating from last week's low at 80.50 and with the market oversold after the tumble from the May 23rd high at 84.50, argues risk is rising for at least a few weeks of correcting higher (and potentially much more). Also, the slowing downside momentum over the last few weeks adds to this view of an approaching bottom,” Solin commented. In concluding his thoughts, Solin went on to say market participants may be better off being patient over the next few days, and establishing long positions near the 80.40 level would provide a better risk/reward set up.
FOMC meeting to heighten DXY volatility
Although the DXY has suffered steep declines of nearly 4.43% since the last week of May, Christopher Vecchio, Currency Analyst at Daily FX believes further downside may be limited as we head into the FOMC meeting. “The Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is working on its second consecutive Inside Day today, and only its fourth positive day over the past fourteen, as investors have hit the brakes on recent volatility ahead of the Federal Reserve’s June policy meeting this Wednesday, added Vecchio.
In further summing up his thoughts Vecchio commented, “Overall, however, there’s a certain “calm before the storm” feeling afoot right now, and the JPMorgan Global FX Volatility Index has plummeted by -9.80% from its yearly high set on Thursday, confirming the downswing in short-term fear. Nevertheless, FX volatility measures have been elevated near their highest level since June 2012.” In conclusion, Vecchio went on to say he believes the US Dollar will be forming a bottom soon after the Fed Rate Decision.
Current technical set up still not confirming a bottom
David Solin of FXA went on discuss a few technical developments on the DXY charts that may help influence direction as we progress through the week. “Broader US$ is consolidating from last week's low at 80.50 and with the market oversold after the tumble from the May 23rd high at 84.50, argues risk is rising for at least a few weeks of correcting higher (and potentially much more). Also, the slowing downside momentum over the last few weeks adds to this view of an approaching bottom,” Solin commented. In concluding his thoughts, Solin went on to say market participants may be better off being patient over the next few days, and establishing long positions near the 80.40 level would provide a better risk/reward set up.