(UDN) Invesco DB US Dollar Index - Ratings and Ratios

The Invesco DB US Dollar Index Bearish Fund (UDN) is designed to reflect the performance of a short position in the DX Contract, which is tied to the U.S. Dollar Index (USDX). The USDX measures the value of the US dollar against a basket of six major currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc. By establishing short positions in DX Contracts, the fund aims to provide investors with a tool to hedge against or speculate on a decline in the value of the US dollar.

The funds underlying index is calculated based on the changes in the market value of the DX Contract, which expires quarterly. This means that the funds performance is closely tied to the fluctuations in the USDX, making it a popular choice for investors looking to bet against the US dollar or protect their portfolios from potential dollar depreciation.

From a technical analysis perspective, the current price of UDN is 18.11, indicating a potential short-term correction given that its below the 20-day SMA of 18.31. However, the 50-day SMA of 17.94 and 200-day SMA of 17.45 suggest a longer-term uptrend, implying that the bearish sentiment towards the US dollar may persist. The ATR of 0.16 (0.89%) indicates relatively low volatility, which may be attractive to investors seeking to manage risk.

Combining technical and fundamental insights, a forecast for UDN can be derived. With the current AUM of $135.83M, the fund has a stable presence in the market. If the US dollar continues to face downward pressure, driven by factors such as monetary policy divergence or economic indicators, UDN is likely to benefit. Based on the technical indicators, a potential target price could be around 18.57 (52-week high), with a stop-loss below 17.45 (200-day SMA) to manage risk. Conversely, if the US dollar strengthens, UDN may face a decline, with support potentially found at 16.52 (52-week low).