US Dollar Index Pulls Back Off Trendline Resistance

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The US Dollar Index (DXY) on Tuesday pulled back to trade at around 90.89 after finding strong trendline resistance. The USDX continues to trade within a descending channel formation in the 60-min chart.

It is now pinned just below the 100-hour SMA line. The 200-hour SMA is a few levels higher. The dollar currency index continues to trade centrally in the 14-hour RSI. This suggests that the current trend could continue through Friday.

The US Dollar Index Fundamentals Overview

From a fundamental perspective, the USDX is trading ahead of a relatively busy period in the US market. On Tuesday, the S&P/Case-Shiller Home Price Indices for February outperformed the (YoY) expectation of 11.7% with a change of 11.9%. The Richmond Fed Manufacturing Index for April outshone the expected reading of 16 with 17, in line with the previous reading. 

On Monday, durable goods orders for March missed the expected change of 2.5% with a change of 0.5%. Nondefense capital goods orders ex-aircraft also came short of 1.5% with a change of 0.9%. On the other hand, durable goods orders ex-transportation posted a change of 1.6% in line with expectations and better than -0.3% posted in the previous period. Durable goods orders ex-defense also improved by 0.5% versus a decline of 0.4% previously.

Looking forward, traders will be waiting for Wednesday’s US retail sales data and interest rate decision. 

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

Technically, the US dollar currency index appears to be trading within a descending channel formation in the 60-min chart. This indicates a significant short-term bearish bias in the market sentiment. 

The bears will be looking to ride the current bearish run by targeting profits at around 90.70 or lower at 90.50. On the other hand, the bulls will look to pounce for rebounds at around 91.06 or higher at 91.30.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the USDX appears to have recently pulled back off an ascending channel formation. It has since broken out of the channel and is now heading towards oversold levels.

The bulls will be targeting long-term profits at around 91.78 or higher at 92.76. On the other hand, the bears will target pullbacks at around 76.40% and 100% fib levels at 90.18 and 89.20, respectively.

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