The U.S. Dollar is making a nice move, as we have seen global risk appetite start to retreat this week. Clearly, as you can see on the daily chart of UUP below, the Dollar remains in a steep downtrend. However, a fierce countertrend move higher is entirely possible, and perhaps already materializing. Given how sentiment had become so negative about our treasured currency, UUP could run 5-10% higher from here, no problem. With that said, it will take a lot of work on the Dollar bulls’ part to reverse this potent overall downtrend. Even if that happens, I expect it to be a process with a lot of backing and filling.
Finally, it remains to be seen if a Dollar rally will crush all equities,or simply the commodity/high beta ones.