The U.S. Dollar is trading flat against a basket of major currencies early Monday. The lack of fresh economic data is helping to keep the range tight and the volume low. Treasury yields, which have guided the direction of the dollar recently, are also directionless.

On Friday, the dollar index posted a potentially bullish closing price reversal bottom, but without a confirmation, the chart pattern is somewhat meaningless.

At 01:27 GMT, June U.S. Dollar Index futures are trading 90.030, up 0.025 or +0.03%.

Daily June U.S. Dollar IndexDaily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, Friday’s closing price reversal bottom could be a sign that momentum may be getting ready to shift to the upside.

A trade through 90.155 will confirm the closing price reversal bottom. This could trigger the start of a 2 to 3 day counter-trend rally. A move through 89.630 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. A trade through 90.280 will change the minor trend to up. This will reaffirm the shift in momentum.

The minor range is 90.910 to 89.630. Its 50% level at 90.270 is the first upside target.

The short-term range is 91.435 to 89.630. If the minor trend changes to up then look for the rally to extend into its retracement zone at 90.535 to 90.745.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index is likely to be determined by trader reaction to 90.155.

Bullish Scenario

Taking out 90.155 will confirm Friday’s closing price reversal bottom. This could lead to a labored rally with the first potential target a resistance cluster at 90.270 – 90.280.

A move through 90.280 will indicate the buying is getting stronger. If this move is able to create enough upside momentum then look for the rally to possibly extend into the short-term retracement zone at 90.535 to 90.745.

Bearish Scenario

The inability to overcome 90.155 will signal the presence of sellers. The first downside target is a minor pivot at 89.845. If this fails then look for the selling to extend into Friday’s low at 89.630. This is a potential trigger point for an acceleration to the downside.

Story continues

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This article was originally posted on FX Empire


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