US dollar consolidates during light holiday trading

European markets are going to end the day with a small gain on Friday amid light volume in the wake of holiday trading after an earlier rally in global shares on signs the Omicron Coronavirus may not hamper the global economic recovery.

As market players grapple with concerns over Coronavirus restrictions and tighter central bank policies, there are signs that the heavily mutated omicron strain is milder than earlier variants such as delta.

Despite encouraging signs from the pandemic, the dollar is flat in trading in Europe on Friday, pointing to a lower weekend for the greenback.

US dollar index is stuck in range

DXY sellers take a breather around the weekly low near 96.00. During the last four trading days, the greenback fell consecutively before rebounding off 95.98 support. A further factor contributing to the corrective pullback could be the rebound in US 10-year Treasury yields and consolidation of the latest losses during the holiday season.

The index has been consolidating within a symmetrical triangle pattern, retreating from November’s high at the 96.92 mark. While the 95.90 in the smack of the lower edge of the pattern has held support. If selling pressures intensify, a ecisive break below this hurdle could drag the king dollar down to the immediate support at the 95.54-mark, lying on the vicinity of 50-day exponential moving average.

In the lack of bullish momentum, oscillators indicates that the market is developing in favour of sellers who attempt to retake control. The RSI is pointing down in the neutral territory and the momentum has just crossed the 100 threshold, trending downward.

Alternatively, to continue upside on the back of the stronger dollar the USD fans should break above the November’s high at 96.92.