On Friday, the US dollar index pulled back from the session highs of about 99.42 to trade at about $99.26 after the latest US data. The DXY trades within a slightly ascending channel formation in the 60-minute chart.

The US dollar currency index still trades above the 100-hour moving average line, despite the pullback. As a result, the USDX 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 US market. On Friday, the Michigan Consumer Sentiment Index for May missed the expected reading of 48.2, with a reading of 44.8. The Michigan Consumer Expectations Index for the period also fell short of 48.5, with a reading of 44.1. 

On the other hand, the UoM 5-year consumer inflation expectation for the month rose to 3.9%, up from 3.4% in April, beating the forecasted rate of 3.4%. The UoM 1-year consumer inflation expectation for the period also outshone the estimate of 4.5%, with a rate of 4.8%, up from 4.5% in April.

Earlier in the week, the US pending home sales for April outperformed the expected (MoM) change of 1%, with a change of 1.4%. The preliminary S&P Global Manufacturing PMI for May also exceeded the forecasted reading of 54, with a reading of 55.3, while the preliminary S&P Global Services PMI for the period missed the forecast of 51, with a reading of 50.9. 

Elsewhere, the initial jobless claims for last week came in better than expected, with 209k versus a forecast of 210k, down from the preceding week’s claim count of 212k.

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 pulled back to avoid rallying into overbought conditions.

Therefore, the bears will look to extend the latest pullback towards 99.10 or lower to 98.94. On the other hand, the bulls will look to pounce on profits at about 99.42 or higher at 99.58. 

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the US dollar currency index has completed an upward breakout from a descending channel formation. However, the 14-day RSI still has some room left to run before reaching overbought conditions.

Therefore, the bulls will look to extend the latest rebound towards 100.16 or higher to 101.00. On the other hand, the bears will look to pounce on profits at about 98.50 or lower at 97.62.