The US Dollar Index (DXY) on Friday plunged to trade at a new 2-week low of about 93.00 following the latest round of US data. The USDX continues to trade within a bearish channel in the 60-min chart.
The dollar index has now fallen several levels below the 100-hour and the 200-hour SMA lines. It is currently close to touching the trendline support. This could trigger a short-term rebound.
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. The earnings season has gone quiet in readiness of Q3 earnings. However, with presidential elections around the corner, markets are still relatively volatile. President Trump’s COVID-19 test caused a short-term disturbance, but that’s now over after positive progress in recovery.
Earlier in the week, the US ISM services PMI beat the expectation of 56.3 with 57.8. The Services New orders index also outperformed the expected reading of 44.7 with 61.5. On the other hand, the ISM employment index and the ISM prices paid missed the expectations of 58.1 and 61.1 with 51.8 and 59, respectively.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the USDX appears to be trading within a gently declining channel formation in the 60-min chart. This indicates a slight short-term bearish bias in the market sentiment. The DXY appears to be approaching a rebound amid touching the trendline support.
The bulls will be targeting short-term rebound profits at around 93.44 or higher at 93.81. On the other hand, the bears will look to pounce for profits at around 92.75 or lower at 92.41.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the USDX appears to be trading within a sharply descending channel. This indicates a strong long-term bearish bias in the market sentiment. The dollar index recently rebounded off the trendline support to surge midway 0.00% Fib level and 23.40% fib level.
The bulls will be targeting long-term profits at around 23.60% and 38.20% Fib levels at 94.43 and 96.01, respectively. On the other hand, the bears will look to pounce for profits at around 0.00% Fib level at 91.69, or lower at 89.99.