US Dollar Index Resistance 96.565, Support 94.820

The U.S. Dollar finished slightly higher on Thursday in a wild trading session. The greenback rose after a higher-than-expected U.S. consumer inflation report for January was released at 13:30 GMT, but fell amid expectations of other central banks joining the Federal Reserve in fighting rising inflation, only to rise into the close.

On Thursday, the March U.S. Dollar Index settled at 95.548, up 0.054 or +0.06%. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) is at $25.61, up 0.04 or +0.16%.

The consumer price index (CPI) rose 0.6% from December, the Labor Department said, while in the 12 months through January, CPI jumped 7.5%, the biggest year-on-year gain since February 1982.

The dollar reversed course as the market mulled how other central banks will fight inflation that’s on the rise globally. The CPI numbers not only changed expectations for the Fed, but it also likely impacted on how aggressive the European Central Bank (ECB) and Bank of England (BOE) will be.

But when the dust finally cleared, dollar traders said the rise in Treasury yields made the U.S. Dollar a more attractive investment.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has shifted to the downside.

A trade through 96.100 will signal a resumption of the uptrend. A move through 95.145 will change the main trend to down.

The minor trend is down. This is controlling the momentum. A trade through 96.100 will change the minor trend to up.

The main range is 93.200 to 97.440. Its retracement zone at 95.320 to 94.820 is support. This zone stopped the selling at 95.160 on Thursday.

The short-term range is 97.440 to 95.145. Its retracement zone at 96.295 to 96.565 is the nearest resistance zone.

Daily Swing Chart Technical Forecast

The direction of the March U.S. Dollar Index early Friday is likely to be determined by trader reaction to 95.63.

Look for an upside bias to develop on a sustained move over 95.635 and the downside bias to resume on a move under 96.625.

The nearest upside target zone is 96.295. The closest support area is 95.320 to 94.820.