The US dollar index on Friday bounced off the trendline support at 104.698 to rally towards 105.68 before finding resistance at the 100-hour moving average line. The dollar currency index continues to trade within a gently descending channel formation in the 60-min chart.
The USDX also appears to be dancing strong trendline resistance following Friday’s rebound. As a result, it pulled back later to avoid slipping into the overbought conditions of the 14-hour RSI.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the USD/CAD currency pair is trading at the back of a relatively busy period in the US market. On Friday, the preliminary Michigan consumer sentiment index for August beat the expected reading of 52.5 with a higher reading of 55.1. On the other hand, the initial jobless claims for last week came in better than expected with a claim count of 262k on Thursday versus a forecast of 263k, while the continuing claims missed the consensus market estimate of 1.407 million with a higher tally of 1.428 million.
Earlier in the week, the consumer price index ex-food and energy for July missed the expected (MoM) change of 0.5% with a change of 0.3%. On the other hand, the (YoY) equivalent came short of 6.1% with a change of 5.9% Elsewhere, the general CPI for the period also came short on both the (MoM) and (YoY) basis. The producer price index ex-food and energy for July matched the expectation of 7.6% (YoY).
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 slight short-term bearish bias in the market sentiment.
Therefore, the bulls will be targeting potential breakout profits at about 106.158, or higher at 106.709. On the other hand, the bears will look to extend the current series of declines toward 105.231 or lower to 104.698.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the DXY seems to be trading within a descending channel formation. This indicates a significant long-term bearish bias in the market sentiment.
Therefore, the bears will be looking to retain control of the DXY by targeting profits at about 103.778 or lower at 101.681. On the other hand, the bulls will look to pounce on profits at about 107.539 or higher at 109.347.