After reaching weekly highs around 91 points, the greenback is experiencing downward pressure again.

The strong US retail sales data only provided temporary support for the USD.

Investors remain concerned about the sustainability of the U.S. economic recovery.

In January, retail sales in the United States increased by 5.3% on a monthly basis, more than four times the preliminary estimate of 1.2%.

The increase in the indicator was primarily due to a seasonal correction. In addition, the indicator was positively affected by consumer checks allocated by Congress as part of the previous stimulus package.

Given the exceptionally nominal growth in non-agricultural employment and the slowdown in wage growth, there is every reason to expect a decline in consumer spending in February, as the dynamics of the previous month were fueled by direct payments.

The USD index fell by more than 0.25% on Thursday, to 90.57 points, after rising by 0.4% on Tuesday.

The fervor of dollar bulls cooled the minutes of the Federal Reserve's January meeting, which showed that the central bank is more optimistic about the economic prospects of the United States than before, but is indifferent to talk about rising inflation in the country and is unlikely to raise interest rates or reduce the volume of bond purchases in the foreseeable future.

The USD index needs to return above 91 points in order to extend the recent growth. If this works out, then the next important goal is the current year's high at 91.6 points. This resistance area is reinforced by the 100-day moving average around 91.5 points.

After an unsuccessful attempt to go beyond the consolidation channel on Tuesday, the EUR/USD pair fell by 0.5% the day before. However, it was then able to bounce back from local lows near 1.2020 and recovered to 1.2080.

The pair was trading under the influence of the dollar dynamics on Thursday, as the eurozone did not release any important reports.

The United States published a weekly report on applications for unemployment benefits in the country, which turned out to be worse than forecasts. January data on the US housing market reflected a drop in the number of construction starts. All this increased the pressure on the dollar.

Data on business activity in the EU and the US will be released on Friday, which may put an end to the tug of war between the bulls and bears for EUR/USD this week.

The European purchasing managers' index is expected to rise from 47.8 points in January to 48.1 points in February, while its US counterpart will fall to 56.6 points from 58.7 points recorded a month earlier.

The nearest strong resistance for EUR/USD is located at 1.2100 and further at 1.2150 and 1.2070. Once this level is surpassed, the pair will aim for 1.2200.

In the event of a drawdown under the psychologically important mark of 1.2000, the decline may accelerate in the direction of 1.1950. From here, the pair will open the way to 1.1900 and 1.1870.