The US dollar index on Friday pulled back off session highs of about 103.55 to trade at about 103.29 after the latest round of data. The DXY continues to trade within a descending channel formation in the 60-minute chart.

The US dollar currency index has now fallen to trade closer to the 100-hour moving average line. As a result, the USDX appears to be moving closer to the oversold levels of the 14-hour RSI.

The US Dollar Index Fundamentals Overview

From a fundamental perspective, the US dollar index is trading at the back of a relatively busy period in the US market. On Friday, the preliminary UoM 5-year inflation expectations for January came in at 2.8%, down from 2.9% in December. On the other hand, the preliminary Michigan Consumer Sentiment Index for the period beat the expected reading of 70 with a reading of 78.8. Existing home sales for December missed the expectation of 3.82 million with a tally of 3.78 million, while the existing home sales change for the period came in at -1% compared to a change of 0.8% in the previous period.

Earlier in the week, the initial jobless claims for last week beat the expected claim count of 207k with a tally of 187k. The continuing claims for the preceding week also outshone the forecast of 1.845 million with 1.806 million. Elsewhere, housing starts for December exceeded the expectation of 1.426 million with a tally of 1.46 million, while building permits for the period beat 1.48 million with 1.495 million. Retail sales for December beat the forecast of 0.4% with a change of 0.6% (MoM).

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

Technically, the US dollar index appears to be trading within a descending channel formation in the 60-minute chart. The 14-hour RSI also seems to support a short-term bearish bias as it edges closer to oversold conditions.

Therefore, the bears will be targeting extended pullbacks at about 103.17 or lower at 103.04. On the other hand, the bulls will look to pounce on rebounds at about 103.41 or higher at 103.55.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the US dollar currency index appears to be trading within a sharply ascending channel formation. The 14-day RSI also seems to support a long-term bullish bias as it rises closer to overbought conditions.

Therefore, the bulls will be looking to ride the current rally towards 103.74 or higher to 104.27. On the other hand, the bears will look to pounce on pullbacks at about 102.77 or lower at 102.20.