Chart of the day: Investors lose faith in US dollar
As what had been a very crowded trade in the US dollar index in January unravels, because the trend to weakness in the greenback has been relentless, observed volatility remains subdued and momentum bearish. A surge in futures volume at the end of August suggests even more people have thrown in the towel, forced to review the oft-cited mantra of “strong dollar policy”. Last week’s close below key support at about 93 might force even more investors to seriously rethink the value of their investments in the US. Looking at the chart, a long-term measured target could be 82, roughly the height of the irregular topping pattern forming since 2015 and potentially the top of the massive triangle since 2006.
Nicole Elliott is a technical analyst