On Friday, the US dollar index pulled back from the current 4-week highs of about 99.16 to trade at about 99.94 after the latest U.S. data. The DXY trades within an ascending channel formation in the 60-minute chart.

The dollar currency index continues to trade a few levels above the 100-hour moving average line, despite the latest pullback. Friday’s pullback prevented the USDX from entering the overbought levels of the 14-hour RSI.

The US Dollar Index Fundamentals Overview

From a fundamental perspective, the US dollar currency index trades during a relatively busy period in the U.S. market. On Friday, the U.S. jobs data for December missed the expectation of 60k, with a tally of 50k, down from the previous month’s net job change of 64k. 

On the other hand, the unemployment rate for the month fell to 4.4%, down from 4.6% in November, below the forecasted rate of 4.5%. The average hourly wage growth also outperformed the expected (YoY) change of 3.6%, with a change of 3.8%. The (MoM) equivalent was in line with the estimate of 0.3%.

Elsewhere, the building permits for October came in better than expected, with 1.412 million versus a forecast of 1.35 million. The housing starts for the period fell short of the expected tally of 1.33 million, with 1.246 million. On Thursday, the initial jobless claims for last week came in lower than expected, with 208k versus a forecast of 210k, up from the preceding week’s claim count of 200k. 

Earlier in the week, the ADP employment change for December missed the expected change of 47k, with a change of 41k, up from -29k in November. On the other hand, JOLTS Job Openings for November fell short of 7.6 million, with 7.146 million, down from 7.449 million in October, while the ISM Services PMI for December beat 52.3, with 54.4.

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

Technically, the US dollar index trades within an ascending channel formation in the 60-minute chart. However, the 14-hour RSI has recently pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to extend the latest pullback towards 98.67 or higher to 98.39. On the other hand, the bulls will look to ride the current rally towards 99.16 or higher to 99.43.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the US dollar index has recently completed an upward breakout from a descending channel formation. The 14-day RSI also supports a long-term bullish bias after bounding back to avoid falling into oversold conditions.

Therefore, the bulls will look to stretch the latest rebound towards 100.23 or higher to 101.68. On the other hand, the bears will look to pounce on extended declines at about 97.74 or lower at 96.25.