On Friday, the US dollar index pulled back from the session highs of about 98.83 to trade at about 97.73 after the latest U.S. data. The DXY also completed a downward breakout from an ascending channel formation in the 60-minute chart.

The dollar currency index has now plummeted to trade at a few levels below the 100-hour moving average line. As a result, the USDX fell into 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 Thursday, the initial jobless claims for the week ending August 15 came in higher than expected, with 235k versus a forecast of 225k, up from the previous week’s claim count of 224k.

The continuing claims for the preceding week also missed the expectation of 1.96 million, with a tally of 1.972 million, up from 1.942 million reported in the week ending August 1. The Philadelphia Fed Manufacturing Survey for August missed the expected reading of 7, with a reading of -0.3.

The preliminary S&P Global Manufacturing PMI for August came in stronger than expected, with 53.3 versus the forecast of 49.5. The preliminary S&P Global Services PMI for the period also beat 54.2 with a reading of 55.4.

Earlier in the week, the building permits for July missed the expectation of 1.39 million, with a tally of 1.354 million. The housing starts for the month beat the forecast of 1.3 million with a tally of 1.428 million.

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

Technically, the US dollar index has completed a downward breakout from an ascending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias after falling into oversold conditions.

Therefore, the bears will look to pounce on extended pullbacks at about 97.16 or lower at 96.65. On the other hand, the bulls will look to pounce on rebounds at about 98.29 or higher at 98.83.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the USDX is about to form a head-and-shoulders reversal pattern. The dollar currency index also has room left to run before reaching oversold conditions as it completes the right shoulder.

Therefore, the bears will look to extend the current downward momentum towards 96.42 or lower to 95.12. On the other hand, the bulls will look to pounce on rebounds at about 99.08 or higher at 100.33.