Safe-Haven US Dollar Index Firms Over 96.995 Support Pivot

The U.S. Dollar is trading higher against a basket of major currencies early Monday as the escalation of Western sanctions on Russia threatened further turmoil on world markets. Most of the support for the index is being generated by the weaker Euro which opened the session down over 1% versus the greenback.

At 02:42 GMT, March U.S. Dollar Index futures are trading 97.235, up 0.616 or +0.64%. On Friday, the Invesco DB US Dollar Index Bullish Fund ETF (UUP) settled at $25.85, down $0.12 or -0.46%.

Aside from blacklisting Russian businesses, individuals and banks, Western powers’ moves to cut some Russian banks from the SWIFT global payment system and freeze the Bank of Russia’s reserves are expected to deal a severe economic blow to the country’s economy, with likely spillover effects into Europe and possibly the United States.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 97.735 will signal a resumption of the uptrend. A move through 95.650 will change the main trend to down.

The first minor range is 95.650 to 97.735. The index is trading on the strong side of its pivot at 96.695, making it support.

The second minor range is 95.145 to 97.735. Its 50% level at 96.440 is additional support.

Daily Swing Chart Technical Forecast

The direction of the March U.S. Dollar Index on Monday is likely to be determined by trader reaction to 96.995.

Bullish Scenario

A sustained move over 96.995 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for buyers to make a run at 97.120. Overtaking this level will indicate the buying is getting stronger with 97.735 the next likely target.

Bearish Scenario

A sustained move under 96.995 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the two pivots at 96.695 and 96.440. The latter is a potential trigger point for an acceleration to the downside with 95.650 the major target.

If 95.650 fails as support the main trend will change to down, but counter-trend buyers may try to reestablish new support inside the retracement zone at 95.470 to 94.930.