The US dollar index on Thursday pulled back to trade closer to the 90.00 level after US inflation for May spiked 5%. The USDX continues to trade within an ascending channel formation in the 60-min chart. The DXY recently broke out from a descending triangle pattern.
The dollar currency index remains pinned just below the 100-hour moving average. It has also plunged closer to the oversold levels of the 14-hour RSI. This could trigger a temporary rebound.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the USDX is trading at the back of a relatively busy period in the US market. On Thursday, the US consumer price index ex-food and energy for May beat the expected (MoM) change of 0.4% with a change of 0.7%. The (YoY) equivalent also outperformed the expectation of 3.4% with 3.8%. On the other hand, general CPI beat the expected (YoY) change of 4.7% with a 12-year high of 5%. The (MoM) equivalent also beat 0.4% with a change of 0.6%.
Elsewhere, the initial jobless claims for the week ending June 4 narrowly missed the expected claim count of 370k with a tally of 376k. Earlier in the week, the goods and services trade balance for April narrowly beat the expected balance of $-69 billion with $-68.9 billion. Traders will be looking forward to Friday’s preliminary Michigan Consumer Sentiment Index for June.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the US dollar currency index appears to be trading within an ascending channel formation in the 60-min chart. This indicates a significant short-term bullish bias in the market sentiment.
The bulls will be targeting rebound profits at around 90.29 or higher at 90.45. On the other hand, the bears will look to extend short-term pullback towards 89.84 or lower to 89.64.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the USDX appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment. The USDX has recently bounced back to avoid slipping to oversold levels of the 14-day RSI.
The bears will look to retain long-term control by targeting profits at around 88.49 or lower at 86.75. On the other hand, the bulls will look to push the current recovery towards 91.50 or higher to 93.17.