US dollar up as recession fears ease on mighty retail sales data

The US dollar is stabilizing amid mixed market reactions and fresh data releases.
Retail sales were mighty in July, as were weekly jobless claims data.
Markets remain bullish about the Fed cutting interest rates in September.

The US dollar (USD), as measured by the US Dollar Index (DXY), consolidated and rose towards the 102.90 level during Thursday’s trading session, buoyed by mighty US data, but continued dovish bets continue to limit USD gains.

The US economy remains above trend, which may indicate that the market is once again leaning too much towards easing monetary policy.

Daily Market Factors Review: USD Stabilizes as Retail Sales and Jobless Claims Beat Expectations

Retail sales rose 1% month over month to $709.7 billion in July, according to the U.S. Census Bureau. That figure beat expectations for a 0.3% augment and offset a 0.2% decline in June.
Retail sales excluding cars also rose noticeably by 0.4%, beating the expected 0.1%.
Additionally, initial jobless claims in the week ending August 10 were 227,000, better than the expected 235,000 and lower than the previous week’s revised figure of 234,000.
According to the CME FedWatch tool, the chances of a rate cut in September are now 80%, with markets still confident of a 200 basis point easing over the next 12 months, although this will depend on incoming data.

DXY Technical Outlook: Bias Remains Bearish, But Signs of Stabilization

The DXY technical outlook remains bearish, despite some signs of stabilization. The index is trading below the 20-, 100- and 200-day elementary moving averages (SMAs), confirming the established bearish trend. Momentum-based indicators such as the Relative Strength Index (RSI) are currently hovering around 40, showing signs of stability despite the ongoing selling pressure.

The Moving Average Convergence Divergence (MACD) is also showing red bars that have settled deep into the negative region. While there is a change in momentum, the overall technical narrative is not yet predicting a significant bullish rebound.

Support Levels: 102.40, 102.20, 102.00 Resistance Levels: 103.00, 103.50, 104.00