US Dollar Index Strengthens Over 96.57, Weakens Under 96.29

The U.S. Dollar finished steady-to-better in a choppy-trade on Wednesday as investors digested the latest developments in the Ukrainian crisis after a host of countries announced sanctions against Russia for ordering troops into separatist regions of its neighbor.

On Wednesday, March U.S. Dollar Index futures settled at 96.188, up 0.177 or +0.18%. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) closed at $25.76, up $0.03 or +0.12%.

The United States and allies unveiled more sanctions against Russia, with European Union measures poised to take effect on Wednesday, while Russia’s TASS news agency reported Moscow has started evacuating diplomatic staff from all of its missions in Ukraine, Reuters reported.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 96.430 will signal a resumption of the uptrend. A move through 95.145 will change the main trend to down.

The minor trend is also up. A trade through 95.650 will change the minor trend to down and shift momentum to the downside.

The minor range is 95.145 to 96.430. The market is trading on the strong side of its pivot at 95.790, making it support.

The short-term range is 97.440 to 95.145. Its retracement zone at 96.295 to 96.565 is the next upside target. This zone is potential resistance, but the upper level is also a potential trigger point for an acceleration to the upside.

The main range is 93.200 to 97.440. Its retracement zone at 95.320 to 94.820 is support.

Short-Term Outlook

The direction of the March U.S. Dollar Index early Thursday is likely to be determined by trader reaction to the short-term retracement zone at 96.295 – 96.565.

Look for a bullish tone to develop on a sustained over 96.565. If this move creates enough upside momentum then look for the rally to possibly extend into the January 28 main top at 97.440.

Meanwhile, a failure to sustain a move over the 50% level at 96.295 will signal the presence of sellers. This could eventually lead to a retest of the main support zone at 95.320 – 94.820.