$UUP June Call Options Active, US Dollar Trending Down (UUP, $USD, UUP/SPY Technicals - 4/13/2011)

Chart 1: DXY0 (U.S. Dollar Index) - FreeStockCharts.com
First off, UUP June 2011 $21 call options were active yesterday. 38,231 calls traded with 8,333 contracts open. It closed at 0.68. This morning open interest rose to 34,555. Here is more information: "Some UUP option traders expect dollar rebound" (CNBC). This activity could insuring short UUP exposure or speculating on a Dollar (UUP) rally by June expiration (6/17/2011).

The US Dollar Index (DXY) is clearly trending down. DXY (74.88) broke through a symmetrical triangle in March and is looking for support. The first support level is 74.23 or the 2009 low. If that level fails, 70.70 will be in play or the 2008 low. You can also see the yellow downtrend line DXY must break.

$UUP, the US Dollar Index ETF, broke through the 2009 and 2010 lows in mid-March. UUP needs to break above $22 resistance and take out that downtrend line to save the Dollar. It is interesting that DXY broke the symmetrical triangle right when UUP broke the lows.

The third chart is UUP/SPY(US Dollar ETF/S&P 500 ETF). The ratio is at 0.1634, which is right below May 2008 support (0.167). It will soon test the downtrend line from early 2009 and perhaps re-test 0.167 resistance. If UUP/SPY breaks above ceiling resistance and the downtrend line, it could either mean there is a flight out of risky assets (Dollar up/S&P down), or the market falls faster than the Dollar. The next few months will be interesting; QE2 is ending and the debt ceiling is in play.

UUP (US Dollar Index ETF) - FreeStockCharts.com

UUP:SPY (Stockcharts.com)