From early November through the end of last year, there was plenty of ebullience surrounding the U.S. dollar and the PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP), but that bloom has quickly come off the dollar’s rose as UUP is trading lower this year.

Some currency market observers believe the greenback faces more near-term downside. 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. While many of those currencies were expected to weaken against the U.S. dollar this year, some currency market strategists believe some of the major currencies are oversold against the greenback.

“Returning to the Yen, the expected rally probably will consist of five sub-waves. The first of those may already have begun, so traders might watch for opportunity if the Yen retraces to make a higher low,” notes See It Market.

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