On Friday, the US dollar index bounced back from the session lows of about 101.63 to trade at about 101.82 after the latest US data. The DXY trades within a descending channel formation on the 60-minute chart.

The US dollar index has now advanced to trade slightly above the 100-hour moving average line. However, the USDX still has some room left to run before reaching the overbought 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, the preliminary S&P Global Manufacturing PMI for October outperformed the expectation of 55.6, with a reading of 56, up from the previous month’s equivalent of 55.9. The preliminary S&P Global Services PMI for the period fell to 47.9, down from 48.8, as expected. 

On the other hand, the Michigan Consumer Sentiment Index for October outperformed the expectation of 46.3, with a reading of 48, up from the previous month’s equivalent of 46.3. The Michigan Consumer Expectations Index for the period also rose to 48.8, up from 47.3 in September. The UoM 1-year and 5-year consumer inflation expectations for the month matched the forecasts of 4.7% and 3.5%, unchanged from September.

Earlier in the week, the US building permits for September came in better than expected, at 1.4 million versus a forecast of 1.39 million, down from the previous month’s equivalent of 1.403 million. On the other hand, housing starts fell to 1.221 million, down from 1.288 million, missing the forecast of 1.3 million. Pending home sales for the period missed the forecast (MoM) change of -0.5%, with a change of -7.3%.

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

Technically, the US dollar index trades within a descending channel formation in the 60-minute chart. However, the 14-hour RSI has recently bounced back to avoid falling into oversold conditions.

Therefore, the bulls will look to stretch the current rebound towards 102.00 or higher, up to 102.20. On the other hand, the bears will look to pounce on pullbacks at about 101.63 or lower, down to 101.43.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the US dollar index trades within an ascending channel formation. However, the 14-hour RSI has recently pulled back to recover from overbought conditions.

Therefore, the bears will look to stretch the current pullback towards 100.65 or lower, down to 99.41. On the other hand, the bulls will look to pounce on rebounds at about 102.96 or higher, up to 104.17.