Barclays Research sees a scope for a sizeable USD rally this week.

Here and now, it appears conditions for risk and bonds are deteriorating, and conditions for the dollar rally to extend this week are ripe. 

"First, one of the proximate reasons for the dollar's recent underperformance is losing momentum. This is none other than the performance of semiconductor stocks, which are also one of the key indicators for broader equity momentum and appear to be a lot more range- bound over the past few days. To a non-trivial degree, the strong performance of risky assets has kept the dollar at bay despite data strength and high oil prices," Barclays notes.

"Second, the situation in the Middle East is not mending itself as one (including ourselves) would have assumed a month or so ago. Since the breakdown of the Pakistan talks, both sides have persisted on maximalist demands, with the most recent Iranian set of proposals quite far from something that even a more pragmatic US approach could accommodate. Oil prices have not increased due to the large initial stock of inventories and heavy draw-downs. Clearly, though, signs that the Hormuz strait will stay clogged for longer can only exert upward pressure on oil," Barclays adds.