Dollar Index Picking Up Strength Over 98.595 Pivot

The U.S. Dollar is trading flat against a basket of major currencies early Tuesday after finishing higher for a third straight session on Monday. The catalysts behind the market’s strength were evidence of civilian killings in north Ukraine and the prospect of increased sanctions on Russia, which drove investors to seek safety in the greenback.

At 02:35 GMT, June U.S. Dollar Index futures are trading 98.945, down 0.029 or -0.03%. On Monday, the Invesco DB US Dollar Index Bullish Fund ETF (UUP) settled at $26.46, up $0.12 or +0.44%.

The U.S. currency also continued to garner support from a strong March non-farm payrolls report released Friday that backed expectations for a hefty half a percentage point tightening by the Federal Reserve at next month’s meeting, according to Reuters.

Global outrage spread Monday over civilian killings in northern Ukraine, where a mass grave and tied bodies of people shot at close range were found in a town taken back from Russian forces. Russia though denied the accusations, Reuters reported.

The deaths in Bucha, outside Kyiv, are likely to galvanize the United States and Europe into additional sanctions against Moscow, possibly including some restrictions on the billions of dollars in energy that Europe still imports from Russia.

The Euro was the biggest influence on the U.S. Dollar Index. The common currency was under pressure due to worries about economic damage from the war in Ukraine.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 99.365 will signal a resumption of the uptrend. A move through 97.730 will change the main trend to down.

The minor range is 99.470 to 97.715. The market is currently trading on the strong side of its pivot at 98.595, making it support.

The main support is the long-term Fibonacci level at 98.200.

If the main trend changes to down then support will become a pair of 50% levels at 97.280 and 96.720.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index early Tuesday is likely to be determined by trader reaction to 98.595.

Bullish Scenario

A sustained move over 98.595 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for an eventual test of the main top at 99.365. Taking out this level will signal a resumption of the uptrend with another main top at 99.470 the next target.

A move through 99.470 will reaffirm the uptrend and could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 98.590 will signal the presence of sellers. This could trigger a break into the major Fib level at 98.200. This level is the last support before the main bottoms at 97.730 and 97.715.