On Friday, the US dollar index pulled back from the session highs of about 98.45 to trade at about 97.76 after the latest US data. The DXY trades within a descending channel formation in the 60-minute chart.
The US dollar currency index has now fallen to trade at a few levels below the 100-hour moving average line. As a result, the USDX has since entered 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 US market. On Friday, the preliminary S&P Global Manufacturing PMI for January came in worse than expected, with 51.9 versus a forecast of 552.1. The preliminary S&P Global Services PMI for the period also fell short of 52.8, with a reading of 52.5.
On the other hand, the Michigan Consumer Expectations Index for January outperformed the expectation of 55, with a reading of 57. The Michigan Consumer Sentiment Index for the period also outshone the forecast of 54, with a reading of 56.4. Elsewhere, the UoM 1-year consumer inflation expectation for January missed the expected rate of 4.2%, wiith 4%. The UoM 5-year consumer inflation expectation for the period also fell short of 3.4%, with 3.3%.
Earlier in the week, the annualized US gross domestic product for Q3 exceeded the expectation of 4.3%, with a change of 4.4%. The gross domestic product price index for the period matched the expectation of 3.7%. The initial jobless claims for last week came in better than expected, with 200k versus a forecast of 212k, up from the preceding week’s equivalent of 199k.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the US dollar index trades within a descending channel formation in the 60-minute chart. The 14-hour RSI also supports a bearish bias after entering oversold conditions.
Therefore, the bears will look to extend the latest declines toward 97.03 or lower to 96.32. On the other hand, the bulls will look to pounce on rebounds at about 98.45 or higher at 99.14.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the US dollar currency index trades within a slightly ascending channel formation. However, the 14-day RSI has recently pulled back to avoid rallying into overbought conditions.
Therefore, the bears will look to stretch the latest pullback towards 95.78 or lower to 93.98. On the other hand, the bulls will look to pounce on profits at about 9.43 or higher at 101.15.