FXEmpire.com -
The U.S. Dollar is trading higher against a basket of major currencies late Thursday, but off a 20-year high hit earlier in the session.
The greenback’s strength was fueled by the release of U.S. economic data showing a resiliently strong economy, giving the Federal Reserve the go ahead to aggressively raise interest rates to curb inflation.
At 18:12 GMT, September U.S. Dollar Index futures are trading 109.585, up 0.920 or +0.85%. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) is at $29.36, up $0.25 or +0.84%.
After a lackluster opening, the dollar strengthened after a government report showed that the number of Americans filing new claims for unemployment benefits declined further last week, consistent with strong demand for workers and tight labor market conditions.
In other news, data from the Institute for Supply Management (ISM) showed U.S. manufacturing grew steadily in August as employment and new orders rebounded, while a further easing in price pressures strengthened expectations that inflation has likely peaked.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend resumed after buyers took out Monday’s high at 109.445. A trade through 107.480 will change the main trend to down.
The minor trend is also up. A trade through 108.235 will change the minor trend to down.
The minor range is 107.480 to 109.980. The nearest support is a 50% level at 108.730. The major support is the long-term Fibonacci level at 107.780.
Daily Swing Chart Technical Forecast
Trader reaction to the pivot at 108.730 will determine the direction of the September U.S. Dollar Index into the close on Thursday.
Bullish Scenario
A sustained move over 108.730 will indicate the presence of buyers. If this creates enough late session momentum, buyers may take a run at 109.980. This is a potential trigger point for an acceleration to the upside.
Bearish Scenario
A sustained move under 108.730 will signal the presence of sellers. This could trigger a further decline into the minor bottom at 108.235, followed by the main Fibonacci level at 107.780.
Side Notes
Due to the prolonged move up in terms of price and time, a close under 108.665 will form a potentially bearish closing price reversal top.
For a look at all of today’s economic events, check out our economic calendar.This article was originally posted on FX Empire
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