Chart of the day: Greenback gains

PUBLISHED : Wednesday, 27 August, 2014, 1:23am
UPDATED : Wednesday, 27 August, 2014, 1:23am

Bursting to levels not seen in almost a year, the US dollar index is on a firm upward track. Regardless of whether it is driven by weakness in the euro, which makes up about half the weighting of the index, or because most major and emerging-market currencies have lost value against the greenback, the index has comfortably hit its first measured target at 82.446. The rally should continue to the second target at 83.394. It is worth noting that the initial break above the top of the triangle started at 81, the mean regression of moves since 2008, which means that at that point, the dollar was neither cheap nor expensive against its basket.

Nicole Elliott is a technical analyst