US Dollar Index Finds Support at 100-Hour MA After Pullback

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The US dollar index on Friday plunged from a high of about 94.50 before finding support off the 100-hour moving average. The USDX continues to trade within an ascending channel formation in the 60-min chart.

The DXY bounced back later to trade at 94.07, just above the 100-hour MA. As a result, the dollar index avoided slipping to the oversold conditions of the 14-hour RSI. Therefore, the current rebound could continue ahead of next week’s data.

The US Dollar Index Fundamentals Overview

From a fundamental perspective, the USDX is trading at the back of a relatively busy period in the US market. On Friday, the ISM Markit Manufacturing PMI for September beat the expectation of 59.6 with 61.1, after adding to August’s reading of 59.9. The various manufacturing segments also outperformed estimates apart from the manufacturing Employment Index, which narrowly missed 50.9 with 50.2. 

On the other hand, the Michigan Consumer Sentiment Index for September outperformed the expectation of 71 with 72.8, while personal spending beat 0.65 with 0.8%. Elsewhere, personal income came in short of expectations with a change of 0.2% compared to 0.3%.

Earlier in the week, the US initial jobless claims for last week missed the expected claim count of 335k with a higher tally of 362k, while the continuing claims for the preceding week also disappointed. On the other hand, the annualised US GDP for Q2 outperformed the expectation of 6.6% with a change of 6.7%.

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

Technically, the DXY appears to be trading within a sharply ascending channel formation in the 60-min chart. This indicates a significant short-term bullish bias in the market sentiment. However, the USDX recently pulled back to find support off the 100-hour MA.

Therefore, the bulls will be looking to push the dollar index closer to 94.26 or higher to 94.50. On the other hand, the bears will target extended pullbacks at 93.87 or lower at 93.65.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the US dollar index appears to be trading within a gently ascending channel formation. It has recently rallied to the overbought conditions of the 14-day RSI. Therefore, a pullback could be imminent.

The bears will be targeting potential pullback profits at around 93.00 or lower at 91.84. On the other hand, the bulls will target long-term profits at around 95.14 or higher at 96.26.

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