The US Dollar Index on Friday extended current multi-month lows to 95.71 before bouncing back late on to top 96.08 after non-farm payrolls. The US currency index has been on a bearish run since late last month when the first casualties of coronavirus were reported in the country. 

Friday’s rebound pushed the USDX off oversold levels of the RSI indicator following this week’s declines. The dollar index hit a new 13-month low on Friday, but a rebound could be on the cards.

The US Dollar Index Fundamentals Overview

From a fundamentals perspective, the DXY is trading at the back of another key decision by the Federal Reserve. The US treasury body cut the Funds rate by 50 basis points to 1.25% down from 1.75% previously. This decision also came amid a period of weak economic numbers. Earlier in the week, the ISM Manufacturing PMI missed expectations on all counts. The Markit Manufacturing data also failed to impress.

But on Wednesday, the ISM non-Manufacturing PMI beat expectations on all counts except on Prices Paid where it came short. The Markit Services PMI and the PMI composite were in line with expectations while ADP Employment change outshone estimates. On Thursday, non-farm productivity, unit labor costs, and the initial jobless claims, all came short of expectations. 

And Friday, the US non-farm payrolls beat the expectation of 175k jobs with 273k. Wage growth was in line with expectations at 3% while the unemployment rate edged lower to 3.5%.

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

Technically, the US dollar index appears to be trading under extreme bearish pressure amid coronavirus fears. Other economic data and the US rate cut have also weighed in pushing the DXY to oversold levels of the RSI indicator. 

Therefore, the bears will be targeting short-term profits at around 95.89 or lower at 95.71. On the other hand, the bulls will hope for an immediate rebound towards 96.28, 96.50, 96.71 or higher at 96.93.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the USDX appears to have made a bearish breakout off a slightly bullish channel. This indicates an attempt by the bears to take control of the DXY long-term. 

Therefore, the bears will target long-term profits at around 95.20 or lower at 94.15 going into the new week. On the other hand, the bulls will look to pounce at around 97.20 or higher at 98.36.