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  • DXY loses momentum but keeps business above 93.00 so far.
  • US headline Retail Sales expanded 1.2% MoM during July.
  • Flash Consumer Sentiment came in at 72.8 for the month of August.

The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main competitors, remains on the defensive near the 93.00 mark at the end of the week.

US Dollar Index focused on data, risk trends

The index is consolidating the leg lower after failing once again to surpass the vicinity of the 94.00 mark earlier in the session. In the same line, yields of the US 10-year note recede from recent tops above the 0.72%.

The dollar is therefore on the way to close the eighth consecutive week with losses, always on the back of the prevailing preference for riskier assets and shrinking odds for US lawmakers to pass a bill on a new stimulus package.

In the data universe, July’s headline Retail Sales expanded 1.2% MoM and 1.9% MoM when comes to core sales. In addition, Industrial Production rose 3.0% from a month earlier and Capacity Utilization ticked higher to 70.6%.

Further data saw the advanced U-MIch index expected to rise to 72.8 in the current month.

What to look for around USD

The index stays on the defensive after being rejected once again from the 94.00 region earlier in the week. Looking at the broader picture, investors remain bearish on the dollar against the usual backdrop of a dovish Fed, the unabated advance of the pandemic and somewhat diminishing momentum in the economic recovery, whereas persistent US-China effervescence appears on the supportive side of the greenback. On another front, the speculative community remained well into the negative territory for yet another week, supporting the view that a serious bearish trend could be shaping up around the dollar.

US Dollar Index relevant levels

At the moment, the index is losing 0.18% at 93.07 and faces immediate contention at 92.93 (weekly low Aug.13) followed by 92.52 (2020 low Aug.6) and finally 91.80 (monthly low May 18). On the flip side a break above 93.99 (weekly high Aug.3) would aim for 94.20 (38.2% Fibo of the 2017-2018 drop) and then 96.03 (50% Fibo of the 2017-2018 drop).