The US dollar index on Tuesday pulled back to trade at around 91.26 following the latest round of US data. The USDX still appears to be trading within an ascending wedge formation in the 60-min chart.
It is now pinned just above the 23.60% fib level next to the 200-hour SMA. The 100-hour SMA can be found a few levels below. The latest pullback also appears to have pushed the DXY from the overbought levels of the 14-hour RSI back to the normal trading zone.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the US dollar index is trading at the back of a relatively busy period in the US market. On Tuesday, the US factory orders for March missed the expected (MoM) change of 1.3% with a change of 1.1%. On Monday, the US ISM Manufacturing PMI for April missed the expectation of 65 with 60.7. The ISM Manufacturing New Orders Index and the Employment Index also came short of 66.6 and 61.5, respectively with 64.3 and 55.1. On the other hand, the ISM Manufacturing Prices Paid beat 86.1 with 89.6 while the Markit Manufacturing PMI missed 60.6 with 60.5.
Looking forward, traders will be watching Wednesday’s ISM Services PMIs and the ADP Employment Change for April. Later in the week, the initial and continuing jobless claims will be out on Thursday while the non-farm payrolls for last month will be released on Friday. The next few days will be very busy for the US market with the earnings season also hitting climax.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the US dollar currency index appears to be trading within a gently ascending wedge formation in the 60-min chart. This indicates a slight short-term bullish bias in the market sentiment. It has recently pulled back to avoid crossing to the overbought levels of the 14-hour RSI.
The bulls will be looking to ride the current rally towards 38.20% and 50% fib levels at 91.59 and 91.93, respectively. On the other hand, the bears will pounce on profits at around 90.87 or lower at 90.45.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the USDX appears to have pulled back to break out of an ascending channel formation. It has now bounced back to move towards the initial trend below the 50% fib level.
The bulls will be targeting long-term profits at around 23.60% and 0.00% fib level of 92.39 and 93.33, respectively. On the other hand, the bears will target profits at around 76.40% and 100% fib level at 90.27 and 89.33, respectively.