Over the weekend, there were a lot of opinion pieces about the state of the US Dollar.  Some were very pointed in their belief that the US Dollar has peaked, while others were presaging its demise. This is because China can do things with credit that the US can’t.  A few laid out very specific reasons why last week’s high may very well be more than a local peak; remember the old trading saw, “technicals precede fundamentals.”

Is there any truth to all of this?  And if so, which way are the technical signs pointing – if technicals indeed precede fundamentals.  First, let’s look at the six-month chart:

UUP chart

Source: Fidelity.com

Well not much help there, that’s just a classic steady run-up chart. The very basic technicals — volume, RSI, 100-day SMA — aren’t saying too much other than we probably just hit a local top. RSI is falling fairly fast right now, which is typical behavior after either a short- or long-term top.

Let’s try a longer-term chart (on the Next Page):


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