The U.S. Dollar is edging higher against a basket of major currencies early Tuesday, helped by firm Treasury yields. Volume is on the light side as traders awaited the testimony from Federal Reserve Chair Jerome Powell at 18:00 GMT.

Powell is scheduled to testify before the House of Representatives on the central bank’s response to the pandemic. His remarks, which were released ahead of the hearing Monday evening, are likely to support the notion that the Fed is ready to soon start discussing removing some of its unprecedented stimulus measures enacted during the pandemic.

At 07:49 GMT, September U.S. Dollar Index futures are trading 91.965, up 0.084 or +0.09%.

In other news from Monday, hawkish Fed officials such as St. Louis Fed President James Bullard and Dallas Fed President Robert Kaplan had remarked on the risks of acting too slowly. Meanwhile, New York Fed President John Williams said it was too soon to shift policy.

Daily September U.S. Dollar IndexDaily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 92.395 will signal a resumption of the uptrend. A move through 89.795 will change the main trend to down. This is highly unlikely but there is room for a normal 50% to 61.8% retracement of the recent rally.

The main range is 94.572 to 89.130. The index is currently trading inside its retracement zone at 91.850 to 92.495.

The intermediate range is 93.430 to 89.545. Its retracement zone is 91.490 to 91.950. This is potential support.

Combining these two retracement zones creates a price cluster at 91.850 to 91.950.

The short-term range is 89.545 to 92.395. Its retracement zone at 90.970 to 90.635 is a value area.

Daily Swing Chart Technical Forecast

The direction of the September E-mini U.S. Dollar Index on Tuesday will likely be determined by trader reaction to 91.850 and 91.950.

Bullish Scenario

A sustained move over 91.950 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into 92.395 to 92.495. The latter is a potential trigger point for an acceleration to the upside.

Story continuesBearish Scenario

A sustained move under 91.850 will signal the presence of sellers. If this move generates enough downside momentum then look for a test of 91.490. Taking out this level could trigger an acceleration into 90.970 to 90.635.

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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