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The dollar is 'the greatest security ever,' says chart watcher

Top technician says greenback breakout just beginning

The U.S. dollar is at its strongest levels in more than two years, and top technician Carter Worth says it looks like it's headed even higher.

"It's the greatest security ever," Cornerstone Macro's Worth said Friday on CNBC's "Options Action." "If you think of the total value of capital traded in the equity market, the bond market is double that, and the currency market is double that, and this, of course, is the biggest currency. ... It's the most important security, full stop, bar none."

The dollar may well be the most important security of all time, but the U.S. dollar index is far away from its all-time highs of above 150 back in the 1970s. In fact, the index has been stuck below 100 for more than three years. But Worth sees signs of a brewing breakout.

"What is so important is that, if you have a well-defined trend line, and then you break above it, the key here is after breaking above it, it checked back and is now pivoting off the line again. That confirms the major reversal that's been underway here," said Worth.

Since bottoming in February 2018, the index has climbed more than 10% to its current level – a huge move for a currency that tends to trade in tighter ranges. But right now, the dollar is back in range-bound territory.

"We've basically been stuck for the last 12 months — not a lot of character," said Worth, "and I think this is about to get resolved."

"There are periods of equilibrium, but they don't last forever. At some point, there's a resolution. The betting here is that the resolution is going to be up and out."

So, what's the best way to capitalize on the raging dollar? One vehicle is the UUP U.S. Dollar Index ETF, which has an even more bullish pattern over the last year and a half than the index it tracks.

"That [ETF] is already making slight new highs," said Worth. "We have already taken out the highs, the setup is good, and the betting here is, from how I see it, is more highs to come."

The U.S. dollar index and the UUP were slightly higher in Monday's session.