US Dollar sticks to modest weekly gains above 93

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, is trading in a tight range near session lows as trading volume thins out towards the end of the week. As of writing, the index was at 93.37, losing 0.3% on the day.

Despite today's retreat, the index is looking to close the marginally higher. Although the index came under pressure on Wednesday after the FOMC's July meeting minutes showed that policymakers were concerned about the slowdown in inflation and the uncertainty surrounding the Trump administration's ability to push important policy changes such as the infrastructure overhaul and the tax reform, it was able to recover its losses on Thursday.

With no important data releases on Friday, the greenback's price action was influenced by the ongoing drama in the White House. On Friday, President Donald Trump announced that he fired Stephen Bannon, one of his chief strategists, amid increasing pressure for his ouster. "There is one less white supremacist in the White House, but that doesn't change the man sitting behind the Resolute desk," Democratic National Committee spokesman Michael Tyler said in a statement, and further add "Donald Trump has spent decades fueling hate in communities, including his recent attempts to divide our country and give a voice to white supremacists," as reported by Reuters.

• Trump tells aides he has decided to remove Stephen Bannon - NY Times

This move by Trump seemed to help the risk appetite in the session with the stock markets erasing their early gains and the U.S. Treasury yields turning positive.

• US Treasuries: Yields turn positive after news on Trump advisor Bannon

Nevertheless, regardless of these fluctuations, the index seems to be stuck between the 93 and 94 marks in the last two weeks, struggling to find its next short-term direction.

Technical outlook

94 (psychological level/Aug. 17 high) remains as a critical resistance ahead of 95 (psychological level/Jul. 20 high) and 95.60 (Jul. 14 high). On the downside, supports align at 93 (Aug. 14 low), 92.40 (Aug. 2 low), and 91.90 (May 3, 2016, low).