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  • The index is giving away some ground although keeps the 95.00 handle.
  • US 10-year yields sidelined below the 2.86% area so far.
  • US President Trump said on Thursday he prefers a weaker USD.

The greenback, in terms of the US Dollar Index (DXY), is trading on the defensive at the end of the week although it manages well to keep business above the critical 95.00 milestone.

US Dollar off 2018 highs

After three consecutive daily advances, the index is now struggling for direction although it still trades above the key handle at 95.00 the figure.

The greenback retreated from tops beyond 95.60 on Thursday after President Trump said he prefers a weaker currency, adding that he remains worried about the current tightening cycle by the Federal Reserve and its probable impact on the economy and the country’s competitiveness.

Despite the ongoing soft note, the outlook for the buck stays constructive, particularly after the positive momentum gathered further traction in response to the bullish ‘outside day’ seen earlier in the week.

Looking ahead and absent data releases/events in the US calendar, the index should keep looking to headlines from the White House as well as developments from the current US-China trade war and the persistent sell off in the Chinese Yuan.

US Dollar relevant levels

As of writing the index is down 0.5% at 95.15 and a breach of 94.79 (10-day sma) would target 94.72 (21-day sma) en route to 94.51 (short term support line). On the upside, the next hurdle is located at 95.65 (2018 high Jul.19) followed by 96.04 (50% Fibo of the 2017-2018 drop) and finally 96.51 (monthly high Jul.5 2017).