“The long-term chart shows a major breakout and rally in 2014 and corrective action in 2015. Since peaking in March, the index settled back into a flag pattern, so named for its appearance of a flag flying on a flagpole. It serves to correct the long advance that preceded it and usually resolves to the upside,” reports Michael Kahn for Barron’s.
UUP tracks the price movement of the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. Many are pointing to the diverging monetary policies between the U.S. Federal Reserve and overseas central banks. For instance, the European Central Bank is just starting its quantitative easing program. Meanwhile, the Fed is cogitating on tightening its monetary policy down the line, which should diminish the supply of money sloshing around the economy and strengthen the USD.
PowerShares DB US Dollar Index Bullish Fund
