I agree, udn broke it's uptrend. Short FXY, Long UUP
The labor market report was a bearish Christmas present in a box. On the outside it looked like a nice gift for the US market bulls but once you opened it up you realized this is a terrible labor report with people dropping off the unemployment rolls and the only growth (or lack of really with the loss) was from temp hiring; hospitals using temp agency work for the winter months etc. I don't want to get into the birth death model's affect but some say as many as 80k jobs were gained from it. Then you have the second half of the gift for market bears; the illusion that economy is getting better upping bets the fed will actually do its job and raise rates; doesn't matter if they do its the perception that counts. If the dollar jumps the carry trade is dead; read Rubini's "The mother of all carry trades" to understand the affect.
From a purely technical perspective this dollar bearish etf broke and closed below its 50 day moving average along with it's long term internal trendline (the one that excludes the low on Nov 3rd)
"On the outside it looked like a nice gift for the US market bulls but once you opened it up you realized this is a terrible labor report"
You just explained why the dollar should continue to fall. If shorts covered friday because strong jobs numbers will supposedly result in a rate increase [it won't anyway] you explained why they are wrong. If the dollar went up because they're wrong then the dollar will resume it's fall.