On Friday, the US dollar index pulled back from the session highs of about 104.05 to trade at about 103.69 after the latest U.S. data. The DXY trades within a sideways pattern formation in the 60-minute chart.

Friday’s pullback pushed the USDX next to the 100-hour moving average line. However, the US dollar currency index still has room left to run before reaching the oversold 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 U.S. market. On Friday, the preliminary Michigan Consumer Sentiment Index for March fell to 57.9, down from 64.7 in February, missing the forecast of 63.1. On the other hand, the preliminary UoM 5-year consumer inflation expectation for the month improved to 3.9%, up from 3.5%.

On Thursday, the producer price index for February fell short of the forecasted (MoM) change of 0.3% with a change of 0%, while the (YoY) equivalent missed 3.3% with 3.2%. On the other hand, the producer price index ex-food and energy missed both the (MoM) and (YoY) forecasts of 0.3% and 3.5%, respectively, with -0.1% and 3.4%. 

Earlier in the week, the U.S. JOLTS job openings for January outshone the forecast of 7.63 million with a tally of 7.74 million. The consumer price index for February missed expectations of 0.3% (MoM) and 2.9% (YoY) with 0.2% and 2.8%, respectively. The consumer price index ex-food and energy also fell short of the expected (YoY) change of 3.2% with a change of 3.1%, while the (MoMO equivalent missed 0.3% with 0.2%.

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

Technically, the US dollar index trades within a slightly 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 current pullback towards 103.32 or lower to 102.89. On the other hand, the bulls will look to pounce on profits at about 104.05 or higher at 104.45.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the USDX has recently completed a head-and-shoulders pattern formation. The 14-day RSI also supports a bearish bias as it moves closer to the oversold conditions.

Therefore, the bears will look to stretch the current downward movement towards 102.14 or lower to 100.35. On the other hand, the bulls will look to pounce on rebounds at about 105.91 or higher at 107.53.