In terms of fundamentals, money supply indicators currently support an inflationary/USD weakness view, as we recently discussed. Dollar bears may wish to continue looking at money supply, as a decline in money supply may help thwart further dollar declines. The Federal Reserve has announced its plans to purchase an additional $105 billion in Treasury bonds, which may help increase the money supply.
Disclosure: I am long UDN.
Dollar bulls have been struggling to defend the 80 level on the U.S. Dollar Index; USDX is at the 79.60 support level at the time of this writing. With that in mind, I wanted to take a look at the USDX weekly chart.
Factors I thought were noteworthy in that chart include: