The US dollar currency index on Friday pulled back off the trendline resistance at 105.679 before finding support at 104.939. The USDX still appears to be trading within an ascending channel formation in the 60-min chart.

The dollar currency index continues to trade several levels above the 100-hour moving average line. Friday’s pullback pushed the DXY off the overbought conditions in the 14-hour RSI back to the normal trading zone.

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 US jobs data for December returned a figure of 223k, beating the consensus market estimate of 200k. On the other hand, the unemployment rate of the month edged lower to 3.5% down from 2.6% in the previous month, beating the forecasted rate of 3.7%, while the average hourly wage growth missed the expectation of 5% with a (YoY) change of 4.6%. The labour force participation rate for December rose to 62.3% up from 62.2% in November ahead of the forecasted rate of 62.1%.

Earlier in the week, the ADP Employment Change for December outshone the expected job count of 159k with a higher tally of 235k, while the initial jobless claims for last week came in at 204k, beating the market forecast of 225k. The ISM Manufacturing PMIs failed to match expectations, with the New Orders Index as the only indicator delivering a better-than-expected outcome.

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

Technically, the US dollar currency index appears to be trading within an ascending channel formation in the 60-min chart. This indicates a significant short-term bullish bias in the market sentiment.

Therefore, the bulls will be looking to extend the current streak of gains toward 105.679 or higher to 106.025. On the other hand, the bears will be targeting potential pullbacks at about 104.939 or lower at 104.568.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the dollar currency index appears to have recently completed an upward breakout from a descending channel formation. This indicates a rapid change in the market sentiment from bearish to bullish.

Therefore, the bulls will be targeting extended gains at about 106.689 or higher at 108.018. On the other hand, the bears will look to pounce on profits at about 104.093 or lower at 102.700.