The US Dollar Index (DXY) on Thursday extended the current declines to a new 30-month low of about 89.75 following the latest round of US retail sales. The USDX continues to trade within a descending channel formation in the 60-min chart.
The dollar currency index is now pegged several levels below the 100-hour and the 200-hour SMA lines. The is currently in the oversold territory of the 14-hour RSI. This could trigger a short-term rebound.
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 Thursday, the US building permits for November beat the expected (MoM) figure of 1.55M with a figure of 1.639M. On the other hand, housing starts for the period outperformed 1.53M with 1.547M.
The initial jobless claims for last week came in at 885k, which was higher than the expected figure of 800k. On the other hand, continuing claims for the preceding period came in lower at 5.508M versus the expected claims of 5.598M. The Philadelphia Fed Manufacturing Survey for December missed the expectation of 20 with 11.1.
On Thursday, the US retail sales control group missed the expected change of 0.2% with a change of 0.5%. General retail sales also disappointed with a change of -1.1% (MoM) versus an expectation of -0.3%. The preliminary Markit Manufacturing PMI for December beat expectations while the Services PMI came short.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the USDX appears to be trading within a gently descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment.
The bears will be looking to extend the current short-term declines towards 89.50 or lower to 89.21. On the other hand, the bulls will target short-term rebounds at around 90.00 or higher at 90.29.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the DXY appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.
The bears will be looking to extend the bearish run towards the 100% fib level at 88.25 or lower at 86.13. On the other hand, the bulls will target long-term profits at around 76.40% and 61.80% fib levels at 91.73 and 93.86, respectively.