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Forexpros - Financial Markets Worldwide
Feb 13, 2012 11:27PM GMT
     
 
  New York   London   Tokyo 
   
 

VIX is Showing a signs for a strong dollar coming a head

By   |  Technical Analysis  |  Mar 10, 2010 11:37PM GMT
 
 
Asian Session & today Predictions

During today’s Asian session the markets await some important economic figures from Australia and Japan. Japan will release its Final GDP, which is expected to drop slightly to 1.0% versus 1.1% in the 4th quarter of last year.

With regards to Australian fundamentals, the markets eagerly await Inflation expectation numbers which last month was flat at 3.2%. Employment change is expected to drop from 52.7K to 15.2K and the Unemployment Rate is expected to remain flat at 5.3%. This can be good for the Aussie unless of course there is a surprise in the economic figures, which could adversely affect AUDUSD causing it to drop back towards 0.9070.

Currently there are some indicators I wish to highlight suggesting for a strong US dollar ahead. The indicators that I refer to are the VIX and USD dollar index. The charts below demonstrate the historical relationship between VIX and USD dollar index and a strong US Dollar brought about when the VIX “gaps up” or “gaps down”. 

 
Here are some examples

11-Jan-2010 - Whilst the dollar is clearly retracing to the downside the VIX chart “gaps down” causing the dollar to hike up.

2nd-FEB-2010 – The dollar index has been retracing for two days when the VIX chart “gaps up” the dollar hikes up from 79 to 80.

This week the VIX chart “gapped down” whilst the US dollar index is trading in a side way trend and so should “history repeat itself” the US dollar is likely to start trending higher during the next couple of days.

Currencies predictions for the day

As for the majors, the general trend remains to the downside with the European currency likely to drop back towards 1.3500 during the next trading sessions followed by 1.3430 with some retracements to the upside as mentioned in our previous reports.

The British pound also remains trading below its 1.5000 psychological support level. The key thing to look out for is a daily or weekly close below 1.5000, which could be a sign for another downtrend channel targeting 1.45.

The USDCHF remains trading between 1.0700 and 1.0850 without any break above or below. Today the markets await the SNB rate decision, which is expected to be left on hold at 0.25%. We will need to however look closely at the bank statement for information and any hints to next move for the Swiss Franc. Our target currently remains at 1.0850.

The Gold prices hit our daily target for the day of 1110 USD per ounce and now the gold prices is likely to do some kind of retracement toward 1110 and 1115 before it drops back again towards 1090 and 1070 soon.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
CFDs Quotes
 SPX 500 Futures1346.15-3.30-0.24%  
 NQ 100 Futures2564.70-4.90-0.19%  
 US 3012874.04+72.81+0.57%  
 DAX6738.47+45.51+0.68%  
 UK 1005905.70+53.31+0.91%  
 Japan 2258999.18+52.01+0.58%  
 US Dollar Index79.12+0.04+0.05%  
CFDs Quotes
 Gold1722.05-2.40-0.14%  
 Silver33.593-0.117-0.35%  
 Copper3.826-0.010-0.25%  
 Crude Oil100.89-0.06-0.05%  
 Natural Gas2.446+0.005+0.18%  
 US Cotton No.291.64+1.02+1.13%  
 US Coffee C214.15-4.45-2.04%  
 
 EUR/USD1.3164-0.0023-0.17%  
 GBP/USD1.5730-0.0036-0.23%  
 USD/JPY77.48-0.10-0.13%  
 USD/CHF0.9183+0.0017+0.19%  
 AUD/USD1.0710-0.0022-0.20%  
 USD/CAD1.0009+0.0011+0.12%  
 EUR/CHF1.2088+0.0003+0.02%  
CFDs Quotes
 Euro Bund138.28-0.38-0.27%  
 Italian Govt. B.102.52+0.07+0.07%  
 Euro BOBL124.97-0.26-0.21%  
 UK Gilt115.64-0.13-0.11%  
 US 2 YR T-Note110.23-0.03-0.03%  
 US 10 YR T-Note131.29+0.08+0.06%  
 US 30 YR T-Bond142.82+0.21+0.15%  

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