Dollar on the Move

The PowerShares DB Bull US Dollar Fund ETF (NYSE: UUP) not only is oversold, but also appears to be the beneficiary of flight-to-safety money flows that is reminiscent of last year's stock market plunge. Concurrent with equity market weakness, the dollar has steadily climbed this morning, which has a familiar ring to it from last year’s stock market debacle, which attracted investors into the “safety” of the U.S. currency. Thus far, however, let’s notice that during the past 3-4 weeks the dollar has carved out a small but significant base-like pattern that should resolve to the upside in a run towards key resistance at 79.50/65 in the DXY and to 27.70/75 in the UUP.