December U.S. Dollar Index futures are trading lower. Volume is extremely light due to a U.S. bank holiday. After gapping lower early Monday, the market has barely moved.
The main trend is up according to the daily swing chart. However, momentum is trending lower after posting a potentially bearish closing price reversal top on Friday.
A trade through 94.10 will negate the chart pattern and signal a resumption of the uptrend.
On the upside, the target is a major retracement zone at 94.05 to 94.82. On Friday, the rally stopped at 94.10, inside the zone.
On the downside, the first target is a 50% level at 92.90.
The new main range is 91.215 to 94.10. If the selling pressure increases then we could see an eventual test of its retracement zone at 92.66 to 92.32.
Slashing through the retracement zones is an uptrending angle at 92.84. This angle is also a potential downside target.
I don’t expect much movement into the close. We could see a pickup in volume when the Forex markets reopen on Tuesday, however, I suspect conditions won’t return to normal until the U.S. banks open later in Tuesday’s session.
This article was originally posted on FX Empire