The chart for the US dollar is looking better by the day... currently it sits near mid December highs but looks poised to close slightly above - potentially leading to a chance to break north of this double top pattern. 4 separate closes out of 5 sessions over the 200 day moving average also bodes well.
In the old days a strong US dollar was generally good (or at worst, benign) for the US markets, but with almost all recent market strength coming from (a) weak dollar plays or (b) US multinational exporters who service Asia & who rely in part on a weak dollar for increased price competitiveness - it will be compelling to see what a stronger dollar does in the intermediate term if this action continues. Is the US dollar foreshadowing future weakness for risk markets as has been the inverse relationship for much of the past 2 years? Or foreshadowing higher interest rates?
That said, I view this as a counter trend rally in a long term swoon in the dollar (-40% since 2003, -97% since 1913). But these moves can certainly last months or a few quarters; if the strength continues Americans may yet again be able to travel to Europe without taking a 2nd mortgage out on the house.