The US dollar index on Friday pulled back after setting a new 19-year high of about 105.632 to trade at about 105.120. The USDX continues to trade within an ascending channel formation in the 60-min chart.
The dollar currency index still remains several levels above the 100-hour moving average line despite the pullback. As a result, it has moved off overbought conditions in the 14-hour RSI back to the normal trading range.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the UDX is trading at the back of a relatively busy period in the US market. On Friday, the ISM Manufacturing PMI for June missed the expectation of 54.9 with 53. The ISM Manufacturing Prices Paid also came short of 81 with 78.5, while New Orders Index and the Employment Index both also missed 54.2 and 50.2, respectively with 49.2 and 47.3. On the other hand, the S&P Global Manufacturing PMI for the period outshone 52.4 with 52.7.
Earlier in the week, the US initial jobless claims for the week ending June 24 failed to match the expected claim count of 228k with a higher tally of 231k, while continuing claims for the preceding week also missed 1.31 million with 1.328 million. Elsewhere, the core personal consumption expenditures price index for May missed the (MoM) expectation of 0.4% with 0.3%, while personal spending came short of 0.5% with 0.2%. The Chicago Purchasing Managers’ index for June missed 58 with 56.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the DXY 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 ride the current rally by targeting profits at about 105.351, or higher at 105.632. On the other hand, the bears will target pullback profits at about 104.879, or lower at 104.649.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the USDX seems to be trading within an ascending triangle formation. This indicates a decaying upward momentum in the market. Therefore, a significant pullback could be on the horizon.
The bears would be targeting potential pullback profits at about 103.986, or lower at 102.713. On the other hand, the bulls could target long-term profits at about 106.109, or higher at 107.289.