Profit from Support Bounce on U.S. Dollar Index with UUP
The U.S. dollar (USD) appears to be set to rebound during the next week. Looking at a chart of the U.S. Dollar Index, you can see that the USD is bouncing up off of an uptrending support level.

 

 

Now, there are a few economic announcements---like the Nonfarm Payroll announcement and the Unemployment Rate announcement coming this Thursday---this week that could hamper the USD's resurgence, but the underlying trend looks good for the USD.

 

To take advantage of this movement as a stock investor, you could use an ETF that was created about a year and a half ago by PowerShares---the PowerShares DB U.S. Dollar Bullish Fund (UUP). I like the ticker symbol on this one. It's pretty easy to remember---"U" for U.S. dollar and "UP" for up.

 

Here's how it works. When the U.S. Dollar Index goes up, the UUP goes up. On the flip side, when the U.S. Dollar Index goes down, the UUP goes down.

 

Of course, the U.S. Dollar Index isn't always going to go up. And if you're a long-term bear on the U.S. dollar and want to make money as the U.S. dollar loses value, you can buy the PowerShares DB U.S. Dollar Bullish Fund (UDN)---the evil twin of the UUP. Like its twin, the UDN has an easy-to-remember ticker symbol---"U" for U.S. dollar and "DN" for down.

 

Here's how this ETF works. When the U.S. Dollar Index goes up, the UDN goes down. On the flip side, when the U.S. Dollar Index goes down, the UDN goes up.

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3.25 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."

 

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