The US dollar currency index on Friday bounced off the current weekly lows to reclaim the mid-week losses. The USDX rallied to breach the 100-hour moving average, moving towards the current weekly highs.
The DXY continues to trade within a sharply ascending channel formation in the 60-min chart. As a result, the pair advanced to trade deep into the overbought conditions of the 14-hour RSI. therefore, a technical pullback could be on the cards.
The US Dollar Index Fundamentals Overview
From a fundamental perspective, the US dollar currency index is trading at the back of a relatively busy period in the US market. On Thursday, the US initial jobless claims for the week ending Dec. 10 missed the expectation of 195k claims with a higher claim count of 206k. On the other hand, continuing claims for the preceding week outperformed the expected tally of 1.936 million with 1.845 million. Elsewhere, the Philadelphia Fed Manufacturing Survey for Survey missed the expected reading of 30 with 15.4.
On the other hand, the preliminary Markit Manufacturing PMI for December missed the expectation of 58.5 with 57.8. The Markit Services PMI also came short of expectations with 57.5 versus 58.7, while the Markit Composite PMI slightly beat 56.8 with 56.9. Earlier in the week, the US retail sales for November missed expectations on all counts.
The Omicron variant also continues to affect global markets resulting in off-risk trading, which has boosted the greenback against other currencies.
The US Dollar Index Technical Analysis (the 60-min Chart)
Technically, the DXY 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 96.95, or higher at 97.17. On the other hand, the bears will look to pounce on potential pullbacks at about 96.45, or lower at 96.21.
The US Dollar Index Technical Analysis (the Daily Chart)
In the daily chart, the USDX seems to be trading within an ascending channel formation, phishing the pair towards overbought conditions. This indicates a significant long-term bullish bias in the market sentiment.
Therefore, the bulls will look to retain long-term control by targeting profits at about 97.48, or higher at 98.26. On the other hand, the bears will target long-term profits at about 95.90, or lower at 95.08.