US Dollar Currency Index Plunges to New Weekly Lows Post GDP

The US Dollar Currency Index on Friday plunged to trade at a new weekly low of 97.40. This came following the announcement of the US Q4 GDP data. The Dollar Index pulled back to breach the trendline support of an ascending channel before it quickly eased to retest the current 2-week lows.

The USDX has been trading in an ascending channel since the start of the year, which shows a short-term bullish bias n the market sentiment. Today’s fall pushed it to oversold levels of the short-term RSI indicator.

The US Dollar Currency Index Fundamentals Overview

From a fundamental perspective, the US Dollar Currency Index is trading at the back of a busy period in the US market. The world continues to battle the coronavirus outbreak, but it is still business as usual in several parts of the world. In the US, it is earnings season.

Some of the largest tech companies continue to announce Q4 and full-year 2019 results. Amazon.com Inc (AMZN) smashed earnings and revenue estimates on Thursday after markets closed. This alongside other earnings releases continues to drive the US market.

However, on Thursday, the preliminary GDP for Q4 missed the expectation of 1.8% with 1.5%. The annualized GDP was in line with expectations at 2.1%. Core personal consumption expenditure for Q4 also came short of expectations with 1.3% versus 1.7%. On the other hand, initial jobless claims for last week missed the expectation of 215k with 216k claims while continuing claims for the week before beat 1.733M with 1.703M.

On Friday, personal income for December missed the (MoM) expectation of 0.3% with 0.2% while personal spending was in line at 0.3%.

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

Technically, the USDX appears to have recently made a bearish breakout off an ascending channel. This indicates that the bears could easily trigger a reversal in the trend. 

Therefore, the bears will be targeting short-term profits at around 97.08 or lower at 96.79 going into next week. On the other hand, the bulls will hope for an immediate rebound towards 97.70 or higher at 97.99.

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

In the daily chart, the US Dollar Currency Index still appears to be trading within an ascending channel, which shows a long-term bullish bias. However, Friday’s pullback pushed the USDX below the current 100-day and 200-day SMA lines. This could inspire a reversal.

Therefore, the bears will be targeting long-term profits at around 96.27 or lower at 95.07. On the other hand, the bulls will look to retain long-term control bu targeting profits at around 98.70 or higher at 99.71.

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