On Friday, the US dollar index bounced from the session lows of about 99.09 to trade at about 99.71 after the latest US data. The DXY also completed an upward breakout from an ascending channel formation on the 60-minute chart.
The dollar currency index has now advanced to trade a few levels above the 100-hour moving average line. As a result, the USDX has since ventured into the overbought levels of the 14-hour RSI.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the US dollar currency index trades during a relatively busy period in the US market. On Friday, the Michigan Consumer Sentiment Index for August rose slightly to 51.7, up from 51 in July, beating the forecasted reading of 51. The Michigan Consumer Expectations Index for the month also outshone the estimate of 50.6, with a reading of 51.5, up from the previous month’s equivalent of 50.6.
On the other hand, the UoM 1-year consumer inflation expectations for August fell slightly to 4%, down from the previous month’s equivalent of 4.3%, missing the forecasted rate of 4.3%. The UoM 5-year consumer inflation expectations for the period remained unchanged at 3.3%, in line with expectations.
Earlier in the week, the US personal consumption expenditures price index for August outperformed the expected (MoM) change of 0.1%, with a change of 0.2%. The (YoY) equivalent also came in better than expected, at 3.7% versus a forecast of 3.6%.
On the other hand, the core personal consumption expenditures price index for the period matched both the (MoM) and (YoY) forecasts of 0.2% and 3.3%, respectively. The US personal income for the month outshone the expected (MoM) change of 0.3%, with a change of 0.4%, while personal spending was in line with the estimate of 0.2%.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the US dollar index has recently completed an upward breakout from an ascending channel formation on the 60-minute chart. The 14-hour RSI also supports a bullish bias after entering overbought conditions.
Therefore, the bulls will look to extend the current gains toward 100.19 or higher to 100.71. On the other hand, the bears will look to pounce on pullbacks at about 99.09 or lower at 98.55.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the US dollar currency index trades within a descending channel formation. However, the 14-day RSI has recently bounced back to avoid falling into oversold conditions.
Therefore, the bulls will look to stretch the current rebound towards 101.42 or higher to 102.94. On the other hand, the bears will look to pounce on profits at about 97.96, or lower at 96.30.