The US Dollar Index (DXY) on Friday extended weekly losses to trade at a new 3-month low of about 96.18 points following what had been a terrible week for the greenback.

This week, the SUDX fell from a high of about 97.60 to trade at 96.18 after the US Federal Reserve issued a statement that was interpreted by the market to be negative.

The US Dollar Index (DXY) Fundamentals Overview

From a fundamental perspective, the Federal Reserve refused to rule out a rate cut in 2019 to add to the pressure emanating from trade tensions with China and potentially Mexico.

This month has been relatively weak from an economic viewpoint with Jobs data early in the month missing expectations with 75,000 versus 185,000 forecasts.

The price of gold, which moves against the greenback has also rallied this week to illustrate the growing uncertainty on the growth of the US economy.  As such, the greenback continues to suffer, which in turn results to a decline in the USDX.

The US Dollar Index (DXY) Technical Analysis (the 60-min Chart)

From a technical analysis viewpoint, the US Dollar Index (DXY) continues to trade within a downward channel, which suggests a short-term bearish bias. However, the decline on Friday touched the key trending support down below, which appears to be holding firm.

Next week will be interesting to look forward to as the bulls and the bears seek to claim control. The bulls will target profits at around 96.50 while the bear will look to pounce by targeting profits at 95.86.

The Relative Strength Index Indicator in the 60-min chart shows that the USDX has hit oversold levels and this could be the trigger for the next rebound.

The US Dollar Index (DXY) Technical Analysis (the Daily Chart)

In the daily chart, the US Dollar Index appears to be trading within an ascending channel, which suggests that the bulls have control in the long-term view. The recent pullback also appears to have pushed the USDX to challenge the key support trendline for the bullish channel.

As such, the bulls will be optimistic in the long-term and they could target profits at around 97.33. On the other hand, the bears will hope that the pullback breaches the support trendline by targeting profits at around 95.10.

In summary, the US Dollar Index (DXY) enjoys a short-term bearish bias, but the bulls remain in control over the long-term.