The US dollar currency index on Friday rebounded just above the 100-hour moving average to surge towards the trendline resistance. The USDX failed to advance further with the resistance zone remaining resilient.
The DXY continues to trade several levels above the 100-hour MA following the rebound. It has also since rocketed closer to the overbought conditions of the 14-hour RSI. Therefore a pullback could be on the cards.
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 Michigan Consumer Sentiment Index for February missed the expected reading of 67.5 with 61.7. On the other hand, Thursday the consumer price index ex-food and energy for January beat the (MoM) expectation of 0.5% with a change of 0.6%, while the (YoY) equivalent outperformed 5.9% with 6%.
Elsewhere, the initial jobless claims for the week ending Feb. 4 beat the expected tally of 230k with a lower claim count of 223k, while the continuing claims for the preceding week missed 1.615 million with 1.621 million. Earlier in the week, the US consumer credit for December missed expectations while the goods and services trade balance for the same period came in slightly better than expected.
US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the USDX seems to be trading within a gently ascending channel formation in the 60-min chart. As a result, the DXy has advanced closer to the overbought conditions of the 14-hour RSI.
Therefore, the bears will be targeting potential pullback profits at about 95.80, or lower at 95.48. On the other hand, the bulls will be targeting short-term profits at about 96.31, or higher at 96.67.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the USDX seems to be trading within a gently descending channel formation. This indicates a slight long-term bearish bias in the market sentiment.
Therefore, the bulls will be looking to extend the current rebound towards 97.18 or higher at 98.23. On the other hand, the bears will be targeting long-term profits at about 95.00, or lower at 93.86.