This looks like the move we have been expecting for weeks now. The dollar is rallying off a deeply oversold situation. Not a great time to be short DXY. In fact, the dollar index is bouncing 1% this morning, repairing the damage of the last week as it rockets back up to levels not seen since late April. Is this a complete turnaround? Doubtful. There is still too much concern out there that the DXY ( quote ) is headed down in the long term as it resumes its pre-crisis trajectory . But in there here and now, the technicals are finally back in the dollar's favor and this long-delayed train is in fact leaving the station. We see this in the recent silver move. Remember, the first part of the SLV ( quote ) retreat was done without any participation from the dollar -- a weakening USD should have actually supported silver prices. The fact that the situation moved in the other direction is incredibly dollar-positive. Not good for UDN ( quote ), especially if things start looking squeezed. And in the short term, a stronger dollar puts pressure on commodities and commodity producers. SLV is only the shining tip of the iceberg here.
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