King dollar - just when everybody saw the break down...

...mighty dollar decided to reverse violently higher. Early last week we asked ourselves if the DXY was setting up for a big reversal. We wrote; "Everybody sees the dollar going lower, and positioning is extremely crowded and short...CTAs have been adding big time to dollar shorts. Models are still in short more mode, but given the steep trend, a reversal could get CTAs changing directional bias quickly...whenever we have seen extreme dollar short positioning at these levels, the dollar has tended to bounce." Since then the DXY has moved sharply higher. From last week lows at 89.15 to now approaching the big 90.5 level. The DXY is basically back at early December levels as it trades above the 21 day moving average for the first time since pre elections. The perception of the crashing dollar is slightly different to reality since December. 90.5 is big and then (if) 91. The 50 day moving average sits just above the 91 level. Note the upper part of the big trend channel highs slightly higher from here. Let's see how this plays out as we reach the first bigger resistance since the bounce started, but a lot of dollar bears have been sweating over past sessions.