Chart of the day: Back in the band
The US dollar index is now weaker than when Donald Trump was elected in November 2015. It would appear that his erratic behaviour is taking its toll on the currency and Treasury bond markets, where yields are also back down close to where they were late last year. In other words, the move higher in both of these was a false break or extension to a trend that started last summer; we are now back inside a well established range. Interestingly futures volume on the dollar index has dipped as hopes for further US dollar strength fade, yet open interest has risen slightly suggesting new hedging strategies are being adopted. Expect consolidation mid-range at 96.50, then falling to 93.
Nicole Elliott is a technical analyst