2022-09-27 16:19:44
#MarketNews
THE DOLLAR IS OVERBOUGHT: A SURGE IN VOLATILITY IN THE WORLD CURRENCY MARKETSThe weekly chart showing dollar index futures price action indicates that DX has crossed the upper limit of the long-term channel (1-2) after an impressive rally (+20% in 3 months).
On Monday, extremely high trading volumes were recorded for these contracts, which increases the likelihood of a bullish trend culmination. At the same time, the yen, pound, and euro markets are experiencing bursts of volatility, fueled by important news reports:
→ The Bank of England has made a rather reassuring promise to watch the markets. The news provided support for the pound, which collapsed after plans for the biggest tax cut since the 1970s.
→ Italy's weekend elections lead to a right-wing majority.
→ After intervention last week to support the yen, the Central Bank of Japan plans to enter the bond market.
During the current week, several speeches by Fed representatives are expected, but this is unlikely to exceed the volatility of the previous 5 days. The information background is overloaded and the currency markets seem to have to take a break.
Considering what has been written, one should consider the option of a rollback of the dollar index from the overbought zone — therefore, the euro, pound and yen rates can recover to some extent (consolidate).
To take advantage of trends in the forex markets, consider enlisting the services of a reliable broker like FXOpen. CFDs are complex instruments and come with a high risk of losing your money.
This forecast represents FXOpen Companies opinion only, it should not be construed as an offer, invitation or recommendation in respect to FXOpen Companies products and services or as financial advice.
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