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Dollar ETF UUP turns bullish - for now

May 06, 2011 5:14 AM ETUUP
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Seeking Alpha Analyst Since 2007

Bruce Powers has been involved in the financial markets for over 20 years, as a technical and fundamental analyst, manager, trader, educator and writer. He is currently Head of Trading Strategy Development at Relentless 13 Capital, a cryptocurrency and blockchain company, and Corporate Advisor to Chronos Futures, a systematic trading strategy developer. 

Previously, Bruce was Co-founder and Co-chair of the Dubai Chapter of the CMT Association. He was also President at WideVision, online publisher of the MarketsToday.net Middle East financial portal, as well as Chief Technical Analyst at the portal. For the past nine years Bruce has written a weekly technical analysis column on the UAE stock markets for the Gulf News newspaper, the leading English newspaper in the Middle East, and he has appeared over 150 times on TV business news shows. 

Bruce is a CMT® charter holder, a member of the CMT Association, and earned his MBA in Finance from the Eller College of Management, University of Arizona, USA. 

 UUP, the PowerShares DB US Dollar Bull ETF, gaps up off support in the area of confluence of several Fibonacci measurements, with a surge in volume. This may be an indication that the recent low of $20.84 will hold, at least for now.UUP ETF Long Term Chart

Fibonacci confluence occurs in the range of $20.92 to $21.09, with $20.92 to $20.99 being the more important area given the close proximity of the two measurements.

127.2% extension of the uptrend measured from the 11/09 low = $20.99

161.8% extension of the uptrend measured from the 11/10 low = $20.92

61.8% projection of 6/8/10 swing high to 12/1/10 swing high (not shown on chart) = $21.09
UUP ETF Daily Chart

Over the past several months UUP had been forming a bullish wedge formation with a failure signal on a break down out of the wedge on 4/21/11. UUP closed yesterday back in the territory of the wedge. However, this does not mean that the bullish wedge formation is again valid.


Given the 1.48% rally yesterday on high volume, after hitting a support area confirmed by several measurements, further upside is likely. UUP can to be watched for an entry setup on a pullback towards support ($20.98 closes gap) of the confluence area.

On the upside, at a minimum there’s a good likelihood that the gap from 4/20/11 will be filled at $21.50. This is also near the area of confluence of two Fibonacci downtrend retracement measurements, as can be seen on the third chart. (www.etf-portfolios.com)


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