Wild cards to watch

While a positive economic outlook for the second half and bullish interest rate differentials offer optimism for dollar bulls, there are always a number of wild card scenarios that traders need to be on guard against. Traders should be on the lookout for weaker-than-expected economic data, which could stall expectations of continued Fed tightening, analysts say. Or, if a protracted political battle in Washington, D.C. develops over potential Supreme Court nominees, it could weigh on the U.S. dollar in the short-term, analysts say. But, aside from unexpected negative events, Glassman is optimistic.

"If the third quarter shapes up the way people expect with pretty strong numbers, I think there is a little more room for optimism and a little more room to run on the dollar," he says.