Sparse data releases and low trading volumes weredominantthemes from last week that willhopefullyfade away in the upcoming days as investors digest a number of anticipated reports from both sides of the Atlantic ocean. Retail sales and housing market data, including the builders index and July starts, will steal the spotlight on the homefront. After the last employment report, bullish sentiment on Wall Street will need to see another string over better-than-expected data releases to remain resilient. Major data releases from the overseas currency bloc later today will bring the PowerShares DB USD Index Bullish (UUP, A) onto our radar screen. German as well as eurozone gross domestic product figures are slated to come out before Wall Street's opening bell, helping to shed light on the health of the beat down region; analysts are expecting for German GDP to come in at 0.9%, while the Euro bloc's is expected to have contracted by 0.2%.
UUP has corrected lower over the past two weeks since peaking at $23.14 a share on July 24, 2012 as low trading volumes have allowed the bulls to push higher without much of any economic headlines to get in their way. Nonetheless, the uphill ride for stocks likely won't remain smooth for long as the U.S. dollar appears poised to pop higher; from a technical perspective, notice how UUP has been drifting higher along a rising support line within an upward slopping channel.
UUP appears to be holdingsupportat the $22.60 level, which makes entering into a long position at current levels attractive given the upside potential seeing as how its trading near the bottom half of its short-term range.
Tomorrow's eurozone GDP releases could spark a flight to safe havens if investors react with pessimism; in terms of upside, UUP has potential resistance around $22.80 a share followed by the $23 level. On the other hand, a better-than-expected surprise from overseas will likely create headwinds for the greenback; in terms of downside, UUP has support at $22.60 a share followed by the $22.40 level.As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.
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Disclosure: No positions at time of writing.