Dollar Index Nearing Potential Breakout Level at 100.930

The U.S. Dollar hit a multi-year high against a basket of major currencies on Thursday ahead of the Good Friday holiday in a volatile session with the price action fueled by fresh hawkish comments from a high-ranking Federal Reserve official.  Helping to propel the greenback was a plunge in the Japanese Yen to a two-decade low and a drop in the Euro to a two-week low.

On Thursday, June U.S. Dollar Index futures settled at 100.326, up 0.413 or +0.41%.

Dollar Climbs after Fed’s Williams Calls 50 Basis Point Hike “Very Reasonable”

The U.S. Dollar rose against a basket of major currencies after New York Fed President John Williams said last Thursday the U.S. Federal Reserve should reasonably consider raising interest rates by a half percentage point at its next meeting in May.

“I think that’s a very reasonable option,” Williams told Bloomberg Television in an interview.

Meanwhile, European Central Bank (ECB) President Christine Lagarde offered no clear timeframe for when ECB rates would start to rise. In Japan, the Yen fell to a 20-year low, but bears were nervous after Japanese Finance Minister Shunichi Suzuki warned earlier in the week that the government is watching Yen moves and their impact on the economy “with a sense of urgency”.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 100.770 will signal a resumption of the uptrend. A move through 97.730 will change the main trend to down. This is highly unlikely, but price and time indicators have us watching for a potentially bearish closing price reversal top.

The minor trend is also up. A trade through 99.555 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 99.555 to 100.770. Its 50% level or pivot at 100.165 is potential support.

The second minor range is 97.730 to 100.770. Its 50% level at 99.250 is additional support.

The major support is a price cluster at 98.200 to 97.930.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index early Monday is likely to be determined by trader reaction to the pivot at 100.165.

Bullish Scenario

A sustained move over 100.165 will indicate the presence of buyers. The first upside target is last week’s high at 100.770, followed by a main top at 100.930. This is a potential trigger point for an acceleration to the upside with the March 20, 2020 main top at 102.990 the next major target.

Bearish Scenario

A sustained move under 100.165 will signal the presence of sellers. If this move attracts enough sellers then look for the selling to possibly extend into the minor bottom at 99.555, followed by a second pivot at 99.250. The latter is a potential trigger point for an acceleration to the downside with 98.200 – 97.930 the next major target.