On Friday, the US dollar index pulled back from the session highs of about 99.43 to trade at about 99.16 after the latest US data. The DXY had earlier completed a sideways breakout from a descending channel formation on the 60-minute chart.
The dollar currency index continues to trade a few levels below the 100-hour moving average line after the pullback. As a result, the USDX still has room left to run before reaching the overbought levels of the 14-hour RSI.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the US dollar index trades during a relatively busy period in the US market. On Friday, US nonfarm payrolls for August rose from 21k in July to 162k, beating the forecast of 56k. However, the unemployment rate was unchanged at 4.1%, as expected. On the other hand, the average hourly wage growth matched the expected (MoM) change of 0.3%, while the (YoY) equivalent outshone the forecast of 3%, with a change of 3.1%.
On Thursday, the US initial jobless claims for last week increased slightly to 206k, up from the previous week’s equivalent of 204k, missing the forecast claim count of 205k. On the other hand, nonfarm productivity for Q2 matched the expected change of 1.4%, while unit labor costs for the quarter fell short of 1.3%, with a change of 1.2%.
Elsewhere, the ISM Services PMI for August improved to 55.4, up from the previous month’s equivalent of 54.1, beating the forecast of 54.3. The S&P Global Composite PMI for the period was unchanged at 56, in line with expectations. Earlier in the week, the US ADP employment change for August fell to 38k, down from 46k in July, missing the forecast of 47k.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the US Dollar Index has recently completed a sideways breakout from a descending channel formation on the 60-minute chart. The 14-hour RSI has also bounced back to recover from oversold conditions.
Therefore, bulls will look to stretch the current rebound towards 99.43 or higher, to 99.75. On the other hand, the bears will look to pounce on profits at about 98.83, or lower at 98,49.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the US dollar index trades within a descending channel formation. However, the 14-day RSI has recently bounced back to avoid falling into oversold conditions.
Therefore, the bulls will look to extend the latest rebound towards 100.50 or higher, to 101.75. On the other hand, the bears will look to extend the current declines toward 97.82 or lower, to 96.51.