The U.S. Dollar inched higher against a basket of major currencies on Friday, putting it in a position to change the trend to up early this week. For an instant, the index had moved higher for the week, but couldn’t hold on to those gains. A higher close would have produced a weekly closing price reversal top.
On Friday, September U.S. Dollar Index futures settled at 97.404, up 0.016 or +0.02%.
Demand for the safe-haven dollar rose on Friday, as investors grew cautious about a resurgence in U.S. coronavirus cases that has casts doubts on expectations about a V-shaped recovery for the world’s largest economy.
Currencies that thrive with higher risk appetite such as the Euro, British Pound, as well as commodity-linked currencies like the Australian, New Zealand, and Canadian Dollars struggled against the greenback.
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 minor range is 95.570 to 97.700. Its 50% level at 96.635 is support.
The short-term range is 99.885 to 95.570. Its retracement zone at 97.730 to 98.240 is the next upside target and possible resistance area.
The main retracement zone resistance comes in at 99.760 to 100.757.
Investors are getting nervous about a second-wave of coronavirus infections and shedding higher risk assets, while seeking protection in the safe-haven U.S. Dollar. If this trend continues then look for a breakout to the upside.
The rally could be labored at first with potential resistance coming in at 97.700, followed closely by 97.730. Overtaking this level could trigger a surge into 98.240.
The Fibonacci level at 98.240 is a potential trigger point for an acceleration to the upside with the next potential upside targets coming in at 99.760 to 99.885.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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