Carter Worth shared with the viewers of CNBC's "Options Action" his technical analysis for the U.S. dollar.
He noticed on the long-term chart that the U.S. dollar index has broken above its downtrend line. After the breakout, it checked back and it bounced off the line and moved higher. Worth sees this as a major reversal sign. He has also noticed a reversed head and shoulders pattern and ascending wedge, which he interprets as bullish.
To make a bullish bet, Mike Khouw wants to use options in Invesco DB US Dollar Index Bullish Fund (NYSE: UUP). He wants to buy the Sept. 26 call for 65 cents. The trade breaks even at $26.65 or 0.38% above the current stock price. Khouw explained that these calls are already in the money by 55 cents.
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