The U.S. Dollar Index [also tracked via the PowerShares DB US Dollar Index Bullish (NYSE:UUP) ] pulled back this past week after breaking out of a bullish flag pattern on the weekly chart. This pullback on the weekly chart appears to be just a normal pullback bar after a sharp move higher. However, when the dollar declines most commodity and inflationary stocks will rally. This can be seen even on intra-day charts as the dollar is usually very strong before the U.S. markets open. Once the opening bell rings at the NYSE the dollar will usually decline giving the markets a bid higher. When this type if intraday action takes place day after day it allows the dollar and the major stock indexes to gain ground and trade higher on the daily charts together. As mentioned last week the U.S. Dollar Index will have resistance every point higher as well as support every point lower.
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