The performance of the US economy has been reasonably good. The outlook is also good. We have been monitoring downside risk, particularly from global developments. The dangers that the Fed sees facing the American economy are not homegrown but are global and trade factors from the China dispute and Brexit to the worldwide slowdown in growth. There is nothing in the US economy that presents a threat to the US economy, downside risks, are coming from abroad. Said, Mr. Powell in his news conference following the Fed announcement.
Even though the Fed cut interest rates by a quarter-point, from 2.5 percent to 2.25 percent. But Powell’s positive words about the US economy supported the US dollar against the majors.
Powell warned those who assumed that what happened is the beginning of the future rate cut. “That is not what we are seeing now, that’s not our perspective now.’
He pointed out that the Fed has gradually moved to a more appropriate policy for this year after the interest rate increase last December.
The U.S dollar index is very bullish. Immediate support comes at 98.00 levels. Stability above this level aims the 98.75 levels. A halt is likely, it may test 98.00 levels before attempts to break higher. Anyway; above 98.75 pave the way to 99.55 /100.15 levels.
On the downside, below 98.00 sees a pullback risk to 97.45/96.95 levels before another rise.
In conclusion: The U.S dollar index remains very bullish as long as trades above 98.00 levels.