The greenback was trading stronger against all the major peers on Friday (yen excluded) and the dollar index rose to fresh cycle highs. It was trading 0.50% higher during the London session, changing hands at 96.10, which are levels unseen since July 2017.

Earlier in the day, the Financial Times reported that the ECB was concerned about the Turkish exposure of some lenders, mainly BBVA, Unicredit and BNP Paribas. These banks could be in big trouble, considering how steep the decline of Turkish assets has been. The Turkish lira has plunged 15% in the last two days, while Turkish stocks and bonds are crashing as well.

Financial markets were hit again by risk-off sentiment and stocks fell worldwide, while the yen and the US dollar+bonds benefited from this sentiment.

Later in the day, more volatility could come after US CPI numbers for the month of July. The year-on-year change should rise to 3.0% from 2.9% previously and the core gauge is seen staying at 2.3%. Accelerating inflation might be positive for the greenback.

The next target for bulls is at the resistance line around 96.20 and if broken, further rise toward 96.90 could occur.

On the downside, the key support is now at previous highs at 95.50 and as long as the price remains above, the short-term outlook seems bullish. The next buying zone could be around 95.00.