![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieW4zGJSYM6LkfTvdiv84PYs9iHMq_mwTL2zMpGbbbM-yhgRIAQQc69uFoPjuLasYBqmqgA1y4QPEaJZoxmgpvta7xIO2CW57ZNO7wZgW9Hvo7RcDPXCIfD11OHU6mz5jut3DxlS7RKwU/s400/Chart+of+UUP1.gif)
Overall, the dollar is in the middle of a rally that so far has three legs - up (A), sell-off/correction (B) and a resuming of the trend (C). Let's break this down.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRle8YqQ7J1fYXYgUXhYw9V7PVCs5v2CMCgz8R35qrOohVmLIpsOGZGs3GAnJbpNgDQGNBd9_95zCktH2nxO1itnF6jLk2eJRhpABqneg8UK5EcvpbvmlKSu7y1MZgU-lJ4DbxyW4m_E0/s400/Chart+of+UUP2.gif)
In the first leg up, we had some major gaps higher (1) indicating there was a fundamental shifting in supply and demand.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5arklFZRcJpZry7OeiSsTQdDRG4FZ3t6FYw102XL-NE_rKvs-VlZZi6I9tf3nhnHvSzuRtzOOuWRrblrBHmA2Atpm0JgooYyMaPBHr7T8JF8mfUibTcUbazcmNlQ4EMyhK1spgCLqonE/s400/Chart+of+UUP3.gif)
Prices rallied to previous highs before forming a pennant pattern (B). Prices sold-off to the 50% Fibonacci retracement level.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg68PLci25MJaRdnVHpAboxAGdGKShoaAeIY6f61sXS5mia03ACgnsEJ8apdMGfxbz62gHeDsgGGLUHFoVwQLQzr0GYU9ZqU2TMjnmnRvl5D_WBLaeJ4gOc-4mTg02L2E0Dv1aqUa3sejM/s400/Chart+of+UUP4.gif)
Prices resumed their rally (C). Along the way they have gapped higher several times (1) and broken through previous levels (2).