It was only a week ago that I was looking at the Dollar and saying: "The inability of the Dollar to bounce when are investors are extremely bearish suggests that oversold has become more oversold. This is the definition of a strong down trend." This week, prices have reversed rather dramatically, and in all likelihood, the Dollar will end the week with the down trend reversed and the intermediate term trend looking up.

See figure 1 a weekly chart of the PowerShares DB US Dollar Bull (symbol: UUP). Key pivot points (areas of buying and selling or support and resistance, respectively) are noted on the chart. Last week prices closed below support levels and we were bearish, and support became resistance. This week it is likely that UUP will close above resistance (old support), and this is bullish. A reasonable intermediate term price target is 23.84, which is the down sloping 40 week moving average.

Figure 1. UUP/ weekly

Figure 2 is a daily chart of UUP. The close above the pivot at 22.28 is an early sign of a trend change. By this daily chart, a reasonable price target is 23.40.

Figure 2. UUP/ daily

In the final analysis, the death of the Dollar is premature. However, a weekly close back below support at 22.36 is bearish. Stay tuned and remain flexible.