The U.S. Dollar is trading slightly lower against a basket of major currencies early Tuesday as traders continue to assess the possible resurgence in COVID-19 infections on the global economic recovery. On Monday, the market reversed early weakness to post a higher close, but so far there has been no follow-through to the upside.
At 05:05 GMT, September U.S. Dollar Index futures are trading 97.440, down 0.061 or -0.06%.
Lower demand for safe-haven protection weighed on the greenback early Monday as investors shrugged off a surge in the number of coronavirus cases from over the weekend. Later in the session, the market mounted a strong intraday reversal to close higher as investors positioned for quarter-end.
Some investors also reacted to improving economic data. Data on Monday showed that contracts to buy U.S. previously owned homes rebounded by the most on record in May.
Thursday’s jobs report for June was also a factor in portfolio adjustments. U.S. employers are expected to have added 3 million jobs in June, according to the median estimate of economists polled by Reuters. Projections vary widely among economists, however, from a few as 405,000 jobs to as many as 9 million.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 97.700 will change the main trend to up. A move through 96.320 will signal a resumption of the downtrend.
The short-term range is 95.570 to 97.700. Its 50% level at 96.635 is potential support.
The intermediate range is 99.885 to 95.570. Its retracement zone at 97.730 to 98.240 is the next likely upside target. Sellers could come in on the first test of this area, but be prepared for a breakout if buyers take out 98.240 with conviction.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the September U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at 97.730.
A sustained move under 97.730 will indicate the presence of sellers. If this move creates enough downside momentum over the near-term then look for a possible retest of the short-term pivot at 96.635.
A sustained move over 97.730 will signal the presence of buyers. This could trigger a surge into the intermediate Fibonacci level at 98.240.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire