Chart of the day: Careful with the consensus
Economists and investors are currently overwhelmingly in favour of the US dollar, believing US President Donald Trump will borrow and spend his way to prosperity. Dollar index futures, where the euro has a 57 per cent weighting, saw very good volume since his election win and historical volatility is at its lowest in two years. However, this might pick up this month as price action in January reversed part of the bullish trend for the greenback (which had become overbought) with a bearish engulfing candle. Bullish momentum evaporated in January and a weekly close below 99.50 would confirm that the break above the psychological 100.00 was an extension and false break above the 93.00-100.00 range of the last two years.
Nicole Elliott is a technical analyst