On Friday, the US dollar index pulled back from the session highs of about 100.55 to trade at about 100.19 after the latest US data. The DXY trades within an ascending channel formation on the 60-minute chart.
The dollar currency index continues to trade a few levels above the 100-hour moving average line, despite the pullback. As a result, the USDX still has some room left to run before reaching the oversold levels of the 14-hour RSI.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the US dollar index trades during a relatively busy period in the US market. On Friday, industrial production for August fell short of the forecast (MoM) change of 0.3%, with a change of 0%. On Thursday, the initial jobless claims for last week came in better than expected, at 196k versus a forecast of 208k, down from the previous week’s claim count of 206k.
On the other hand, building permits for August fell to 1.394 million (MoM), down from 1.433 million, missing the forecast of 1.41 million. Housing starts for the period also missed the expectation of 1.31 million, at 1.275 million (MoM), down from the previous month’s 1.309 million.
Earlier in the week, the Federal Reserve raised the base interest rate to 4%, up from 3.75% as expected. The US retail sales for August came in better than expected, with a change of 1.2% (MoM) versus a forecast of 0.8%. The retail sales ex-autos for the period also exceeded the forecast of 0.5% (MoM), with a change of 1.4%.
Elsewhere, the Philadelphia Fed Manufacturing Survey for September fell to 37.8, down from 47.4 in August, beating the forecast reading of 30.5. Pending home sales for August fell short of the forecast change of 0.3%, with a change of 0% (MoM).
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the USDX trades within an ascending channel formation on the 60-minute chart. However, the 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.
Therefore, the bears will look to stretch the latest pullback towards 100.00 or lower, down to 99.81. On the other hand, the bulls will look to pounce on rebounds at about 100.37 or higher, up to 100.55.
US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the DXY has recently completed an upward breakout from a descending channel formation. The 14-day RSI has also bounced back to move closer to overbought conditions.
Therefore, the bulls will look to stretch the current rebound towards 100.99 or higher, up to 101.73. On the other hand, the bears will look to pounce on profits at about 99.36 or lower, down to 98.59.