On Friday, the US dollar index extended its decline to set a new 2025 low of about 107.21 before bouncing back to 107.46. The DXY trades within a descending channel formation in the 60-minute chart.

The dollar currency index has now fallen to trade several levels below the 100-hour moving average line. However, Friday’s late rebound prevented the USDX from falling into the oversold 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 U.S. market. On Friday, the preliminary S&P Global Manufacturing PMI for January outshone the forecast of 49.6 with a reading of 50.1.

On the other hand, the preliminary S&P Global Services PMI missed the expectation of 56.5 with a reading of 52.8. Elsewhere, the Michigan Consumer Sentiment Index for January fell to 71.1, down from 73.2 in December, missing the forecast of 73.2. The UoM 5-year consumer inflation expectation for the month also missed 3.3% with 3.2%, down from 3.3%.

Earlier in the week, the U.S. initial jobless claims for the week ending January 17 came in higher than expected with 223k versus a forecast of 220k, up from the preceding week’s equivalent of 217k. The continuing claims for the week ending January 10 also failed to match the forecast of 1.86 million with 1.899 million, up from the preceding week’s equivalent of 1.853 million.

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

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

Therefore, the bears will look to extend the current run of declines toward 106.96 or lower to 106.40. On the other hand, the bulls will look to stretch Friday’s late rebound toward 107.94 or higher to 108.47.

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-day RSI has recently pulled back to avoid rallying into the overbought conditions.

Therefore, the bears will look to extend the current pullbacks toward 105.48 or lower to 103.34. On the other hand, the bulls will look to pounce on profits at about 109.77 or higher at 111.91.