There was very little follow-through selling in the June U.S. Dollar Index futures market on Monday, following a bearish reaction to Friday’s weaker-than-expected U.S. Non-Farm Payrolls report. This helped trigger late session which led to a higher close. Shortly before the cash market opening, the index is trading higher.
The selling pressure on Monday stopped at 96.49, on the strong side of a downtrending angle at 98.54 and slightly above an uptrending angle at 96.29. A break through this level could trigger more selling pressure with the best target a pair of angles at 95.56 and 95.41.
On the upside, resistance is layered by several retracement levels including 97.775, 98.04 and 98.45.
The first uptrending angle which has to be overcome is at 98.04. This angle forms a resistance cluster with the 50% level at this same price. This is the best upside target today. Besides being resistance, it is also a trigger point for an upside breakout.
The next downtrending angle comes in at 98.66. A sustained move over this angle could extend the rally into addition resistance targets at 99.12 and 99.72.
The early price action today suggests there is a bullish tone developing. The current momentum suggests the market has a clean shot at 98.04. Watch for selling on the initial test of this level, but be prepared for an upside breakout if this level is taken out with conviction.