The US dollar index on Friday pulled back from the session highs of about 102.07 to trade at about 101.67 after the latest US data. The DXY also completed a downward breakout from a sideways channel formation on the 60-minute chart.
The dollar currency index has now fallen to trade a few levels below the 100-hour moving average line. As a result, the USDX is on the verge of entering the oversold 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 Thursday, the initial jobless claims for last week came in better than expected, at 197k versus a forecast of 200k, down from the preceding week’s revised figure of 198k.
The NY Empire State Manufacturing Index for October also came in better than expected at 25.5 versus a forecast of 10.3, up from the previous month’s equivalent of 7.6. On the other hand, the Philadelphia Fed Manufacturing Survey for October missed the forecast reading of 28.4, with a reading of 20.9, down from 37.8 in September.
Elsewhere, the producer price index for September exceeded the forecast (MoM) change of 0.5%, with a change of 1.3%, up from 0.5% in August. The (YoY) equivalent also rose to 6.3%, up from 5.6%, above the forecast change of 5.3%. The producer price index ex-food and energy for the period beat the expected (MoM) and (YoY) changes of 0.2% and 2.5%, respectively, with changes of 0.3% and 2.6%.
On the other hand, retail sales for September grew by 0.8%, beating the forecast (MoM) change of 0.3%. The (YoY) equivalent also came in stronger than expected, at 0.9% versus a forecast of 0.5%.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the US dollar index has recently completed a downward breakout from a sideways channel formation on the 60-minute chart. The 14-hour RSI also supports a bearish bias as it edges closer to oversold conditions.
Therefore, the bears will look to stretch the current pullback towards 101.22 or lower, down to 100.75. On the other hand, the bulls will look to pounce on rebounds at about 102.07 or higher, up to 102.54.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the US dollar currency index trades within an ascending channel formation. However, the 14-day RSI has recently pulled back to recover from overbought conditions.
Therefore, the bears will look to extend the latest pullback towards 100.20 or lower, down to 98.83. On the other hand, the bulls will look to ride the current run of gains toward 102.96 or higher, up to 104.46.