The US Dollar Index (DXY) on Friday continued to experience strong bearish pressure following the release of the latest US PPI data. The US dollar currency index has been trading within a descending channel in recent trading sessions. It remains below the 100-hour and the 200-hour SMA lines in the 60-min chart.
It also appears closer to the oversold levels of the 14-hour RSI after the latest pullback prevented it from reaching overbought levels. The USDX also looks relatively volatile within the descending channel.
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 Friday the US producer price index for June missed the (MoM) expectations of 0.4% with -0.2%. It also came short of the (YoY) estimate of -0.2% with -0.8%. The PPI ex-food and energy also came short of the (YoY) expectation of 0.4% with 0.1% while the (MoM) equivalent missed 0.1% with -0.3%. On Thursday, the US initial jobless claims for the week ending July 3 beat 1.375M with 1.314M claims while continuing claims for the preceding week of 18.062M were slightly lower than the expectation of 18.95M.
Earlier in the week, the Markit Services PMI for June beat 46.7 with 47.9 while the PMI composite also outshone 46.8 with 47.9. On the other hand, the ISM non-manufacturing PMI for July beat 50.1 with 57.1 while the new orders index outperformed 44 with 61.6. On the other hand, the ISM non-manufacturing employment index outperformed 30.7 with 43.1 while the prices paid beat 53.9 with 62.4.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the USDX appears to be experiencing strong bearish pressure in the 60-min chart. The dollar index continues to trade in a highly volatile bearish channel, which comes shortly after a failed attempt to recover from the May-June plunge.
The bulls will be targeting short-term profits at around 96.97 or higher at 97.36. On the other hand, the bears will look to extend the current short-term pullback towards 96.35 or lower to 95.97.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the US dollar index appears to be trading within a sharply descending channel. This indicates a long-term bearish bias in the market sentiment.
The bulls will be targeting long-term rebound profits at around 50% and 61.80% Fib levels at 98.78 and 99.82, respectively. On the other hand, the bears will look to pounce at around 95.72 or lower at 94.66.