US Dollar, EUR/USD Price Analysis
- The month of March produced outsized volatility in global markets.
- After setting a fresh yearly low in early-March, the US Dollar[1] jumped up to three-year-highs less than two weeks later.
- As the risk aversion theme has settled over the past couple of weeks, US Dollar price action has calmed. But next week brings on the Fed and ECB and the fear trade may not yet be out of the equation.
US Dollar – From Yearly Lows to Three-Year-Highs as Fear Takes Over
The full-force volatility that was in full display through much of March has started to settle a bit. It’s still far too early to call game over or to claim that we’re yet out of the woods, especially with the fireworks that showed in oil markets earlier this week[2]; and as looked at yesterday, there may be another bearish wave to show in US equities[3] after the month-long bounce found some element of resistance coming into this week’s trade.
In the land of currencies, the US Dollar has similarly seen price action calm in the past couple of weeks as the aggressive risk aversion has toned-down. This follows an outsized show of volatility last month that saw the USD[4] move from a fresh yearly low up to a new three-year-high, a run constituting as much as 8.8% of the US Dollar’s value in a ten-day span. A remarkable move in any number of markets but perhaps even more so when considering that this was taking place in the ‘global reserve currency’ of the US Dollar. At the core of the move was fear-driven risk aversion on the way up and a cessation of those fears on the
