Тhe USD is stuck in a tight range vs. the euro and other major currencies, and though he thinks a substantial dollar breakout/breakdown is admittedly unlikely, it'll still be important to watch for any surprises from the US central bank.
The Dollar Index recently touched its highest levels in three months as the greenback surged versus the Australian dollar and other commodity-linked counterparts. Yet resilience in the euro and the Japanese yen has sparked a notable dollar pullback to start the week’s trading. And indeed, the EUR/USD exchange rate continues to trade in a very wide $1.08-$1.15 range since February; it may take a significant shift in market conditions to force a meaningful break. A modest pickup in volatility prices suggests that the week ahead may see larger price swings than the last, particularly ahead of a highly-anticipated US Federal Open Market Committee meeting. A substantial dollar breakout/breakdown is admittedly unlikely, but it will be important to watch for any surprises from the US central bank.
A pickup in short-term volatility suggests a breakout is possible in the week ahead.
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