US Dollar Index Rockets to New Historical Highs After Rate Hike

The US Dollar Index on Friday rocketed to a new historical high of about 113.229 before pulling back slightly to trade at 112.994. The USDX appears to be trading within a sharply ascending channel formation in the 60-min chart.

The DXY has now rallied to trade several levels above the 100-hour moving average line. As a result, the US dollar currency index traded deep into the overbought conditions of the 14-hour RSI.

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 preliminary US S&P Global Manufacturing PMI for September beat the expectation of 51.1 with a reading of 51.8. The S&P Global Services PMI also outshone 45 with 49.2, while the Composite PMI exceeded the expectation of 44.7 with a reading of 49.3. Earlier in the week, the initial jobless claims for the week ending September 16 outperformed the expected claim count of 118k with a tally of 113k. 

The continuing claims for the preceding week also beat 1.4 million with a claim count of 1.379 million. On Wednesday, the Federal Reserve raised the base interest rate by 75 basis points, in line with expectations to 3.25% up from 2.5%. Elsewhere, housing starts for August came in stronger than ex[pected with a tally of 1.575 million versus an expectation of 1.445 million, while building permits missed 1.61 million with 1.517 million (MoM).

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

Technically, the US dollar currency index seems to be trading within a sharply ascending channel formation in the 60-min chart. This indicates a strong short-term bullish bias in the market sentiment.

Therefore, the bulls will be targeting short-term profits at about 113.229 or higher at 113.543. On the other hand, the bears will be targeting potential pullbacks at about 112.710 or lower at 112.363.

The US Dollar Index Technical Analysis (the Daily Chart)

In the daily chart, the USDX seems to be trading within a sharply ascending channel formation. This indicates a strong long-term bullish bias in the market sentiment.

Therefore, the bulls will be looking to stretch the current rally toward 114.438 or higher to 115.877. On the other hand, the bears will be targeting long-term profits at about 111.621 or lower at 110.182.

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