US DOLLAR STRENGTH SENDS AUD/USD PLUMMETING; NFP REPORT EYED
FX markets noticed some heightened exercise throughout Thursday’s buying and selling session pushed by a giant inflow of US Greenback power. The broader DXY Index spiked 0.65% to its highest stage since 14 Might because the US Greenback felt shopping for stress throughout the board of major currency pairs. US Greenback power was notable towards the Aussie particularly with AUD/USD plunging 93-pips on the day.
AUD/USD worth motion trades effectively beneath the 0.7700-handle now, which seems to supply affirmation of the bearish head and shoulders pattern we flagged two weeks in the past. This might recommend AUD/USD is primed to weaken additional, although it’s going to probably be necessary to maintain tabs of the elemental drivers catalyzing the transfer.
The Australian Greenback has confronted recent headwinds not too long ago amid dovish RBA rhetoric whereas the US Greenback has seen waves of demand because of mounting Fed taper threat.Not to say, IG Client Sentiment knowledge on AUD/USD dealer positioning alludes to potential for extra follow-through to the draw back as effectively.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
Nonetheless, outlook for AUD/USD and the broader US Greenback probably hinges on the upcoming launch of nonfarm payrolls and the way the month-to-month jobs report sways the Fed taper debate. NFPs are scheduled to cross market wires Friday, 04 June at 12:30 GMT. As such, in a single day US Greenback implied volatility readings have perked up fairly a bit.
Notably better-than-expected NFP knowledge would probably correspond with broad-based US Greenback power. Alternatively, if NFPs miss consensus forecast, the US Greenback may whipsaw again decrease as bears look to fade current power. In the end, I might be holding a watch out for the route of Treasury yields as a positively-correlated bellwether to the place USD worth motion heads subsequent.
Hold Studying – US Dollar Forecast: Inflation, Fed Taper Debate, Yields are Key
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