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The dollar looks 'phenomenal.' Here's why - trader

A great jobs number sent the U.S. dollar soaring on Friday and some traders expect the greenback rally to continue.

May's nonfarm payrolls of 280,000 soundly exceeded the market's expectations, and that sent both U.S. interest rates and the dollar sharply higher. The yield on the U.S. Treasury 10-year note broke above 2.4 percent, its highest level since October.

"Rates moving higher [means] the dollar is going to continue to go higher," said David Seaburg, head of equity sales trading at Cowen and Co. "The fundamental backdrop here is really strong."

Meanwhile, central banks—most notably in Europe and Japan—are in the process offering rates, which ultimately helps the dollar. The dollar index is now at 13-year highs against the Japanese yen and euro briefly dipped below $1.11 on Friday. Europe's common currency is down 18 percent against the dollar in the past 12 months.

"The dollar's got a lot more room to the upside," added Seaburg. "I'm still a big buyer."

The technicals agree with Seaburg's optimism, according to the chart work of Craig Johnson, senior technical research analyst at Piper Jaffray.

"When you look at the chart of the U.S. dollar, it's phenomenal," he said.

Looking at the dollar index bullish ETF (trading under the ticker symbol UUP), Johnson sees the dollar making a four-year consolidation pattern.

"We've made a nice series of higher highs, higher lows, and the recent price action really has just been a pullback right to the uptrend support line," he said. "From my perspective this still looks like a great trade to the upside. We want to be long the UUP."

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