USD PRICE OUTLOOK: US DOLLAR ADVANCES DESPITE SLIPPING TREASURY YIELDS, BIDEN SET TO UNVEIL STIMULUS PACKAGE
- US Greenback pushed increased on Wednesday regardless of a deeper pullback in Treasury yields
- USD worth motion eyes particulars of president-elect Biden’s stimulus bundle proposal
- The DXY Index seems to be to have discovered help from its 20-day easy shifting common
The US Greenback notched a modest 0.3% acquire on Wednesday as measured by the broader DXY Index. The advance got here regardless of one other decline in yields corresponding with robust demand for long-dated Treasuries. US Greenback energy was seen primarily in opposition to the Euro as a flareup in Italian political threat steered EUR/USD worth motion 65-pips decrease on the session.
DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (21 OCT 2020 TO 13 JAN 2021)
Chart by @RichDvorakFX created utilizing TradingView
The broader US Greenback rebound paused yesterday, however the DXY Index appears to have discovered technical help from its 20-day easy shifting common close to the 90.00-handle. Breaching this space of buoyancy might open up the door for US Greenback bears to push the Buck towards year-to-date lows. Resistance nonetheless seems to be underpinned by the higher Bollinger Band in addition to the 38.2% Fibonacci retracement stage of the 02 November to 06 January buying and selling vary.
Eclipsing these technical obstacles might encourage US Greenback bulls to set their sights on the 100-day easy shifting common. The MACD indicator means that upward momentum could also be accelerating. That mentioned, it could be troublesome for the broader US Greenback to maintain its rebound with out Treasury yields rising additional within the absence of demand for safe-haven currencies.
US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
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Looking forward to Thursday’s buying and selling session, president-elect Joe Biden is about to unveil particulars on his fiscal stimulus plans, which might weigh on USD worth motion. Biden is anticipated to announce a stimulus bundle proposal with a ‘excessive price ticket’ rumored to be round $1.3-trillion. Seeing that Biden is prone to discover sufficient help for his plans from congress set to be managed by democrats, the larger the stimulus plan the extra seemingly Treasury yields may lengthen increased. In flip, and contemplating current market actions, this might assist bolster the US Greenback.
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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