The US dollar index on Friday extended declines to a new 10-week low of about 106.377 following the latest round of US data. The USDX appears to be trading within a sharply descending channel formation in the 60-min chart.
The dollar currency index has now plummeted to trade several levels below the 100-hour moving average line. As a result, the DXY is now trading deep into the oversold conditions of the 14-hour RSI.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the US dollar currency index is trading at the back of a relatively busy period in the US market. On Friday, the preliminary Michigan consumer sentiment index for November missed the expected reading of 59.5 with a reading of 54.7. The preliminary UoM 5-year consumer inflation expectation for October increased from 2.9% in the previous reading to 3%. On Thursday, the initial jobless claims for last week missed the expected claim count of 220k with a tally of 225k.
The US consumer price index ex-food and energy for October missed the (MoM) expectation of 0.5% with a change of 0.3%. The (YoY) equivalent also came short of 6.5% with a change of 6.3%, while the general CPI for the period missed both the (MoM) and (YoY) expectations of 0.6% and 8%, respectively with a change of 0.4% and 7.7%. The monthly budget statement for October read a balance of $-88 billion, beating the forecast of $-90 billion.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the USDX appears to be trading within a sharply descending channel formation in the 60-min chart. This indicates a strong short-term bearish bias in the market sentiment.
Therefore, the bulls will be targeting potential rebound profits at about 106.982 or higher at 107.672. On the other hand, the bears will be looking to extend the current declines toward 105.657 or lower to 104.967.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the US dollar currency index appears to have recently completed a downward breakout from a descending channel formation. This indicates a significant increase in bearish sentiment in the market.
Therefore, the bears will be targeting long-term profits at about 104.615 or lower at 102.561. On the other hand, the bulls will look to pounce for profits at about 108.333 or higher at 110.387.