US Dollar Index: Strong Over 97.965, Weak Under 91.415

The U.S. Dollar is trading higher against a basket of major currencies late Thursday, supported by a weaker Euro, comments from Federal Reserve Chairman Jerome Powell and solid U.S. economic data.

At 20:04 GMT, March U.S. Dollar Index futures are trading 97.775, up 0.361 or +0.37%. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) is at $26.18, up $0.12 or +0.46%.

The Euro extended recent declines against the dollar as investors worried about the impact of rising oil prices after Russia’s invasion of Ukraine.

The dollar also was supported by comments from Federal Reserve Chairman Jerome Powell. Powell is giving a second day of testimony to Congress, after saying on Wednesday that he would support a 25-basis-point hike at the Fed’s March 15-16 meeting and said the Fed would be “prepared to move more aggressively” if inflation does not abate as fast as expected.

Finally, Weekly U.S. Jobless Claims data suggested the labor market was gaining steam. The report showed the number of Americans filing new claims for unemployment benefits dropped to their lowest level this year last week.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 97.965 will signal a resumption of the uptrend. A move through 95.650 will change the main trend to down.

The minor range is 95.650 to 97.965. Its 50% level at 96.810 is the nearest support.

The short-term range is 95.145 to 97.965. Its 50% level at 96.555 is the best support level.

Short-Term Outlook

The direction of the March U.S. Dollar Index into the close on Thursday and early Friday will be determined by trader reaction to 97.965 and 97.415.

Bullish Scenario

A sustained move over 97.965 will indicate the buying is getting stronger. This is a potential trigger point for an acceleration to the upside with 98.500 the next major target price.

Bearish Scenario

A sustained move under 97.415 will signal the presence of sellers. A close under this level will form a potentially bearish closing price reversal top. This could trigger the start of a 2-3 day counter-trend sell-off.