USD Index Stays Above 100 as Trump Likes Strong Dollar Now
Ming Lam May 15, 2020 6:22 AM
U.S. Dollar Bulls should be very happy...
One day after U.S. Federal Reserve Chairman Jerome Powell rejected the idea of implementing negative interest rates, President Donald Trump expressed his support for a strong dollar.
On Thursday, in an interview with Fox Business Network's "Mornings with Maria" program, Trump said: "It's a great time to have a strong dollar, (...) Everybody wants to be in the dollar because we kept it strong. I kept it strong, (...) Right now it's good to have a strong dollar. Right now having a strong dollar is a great thing."
This is in sharp contrast to his repeated complaints against a strong dollar not long before.
While the eurozone and Japan are currently implementing negative interest rates, the U.S. is likely to keep rates positive (though close to zero) in the foreseeable future. And now Trump does not mind a strong dollar. These will keep the greenback on a Bullish Bias.
U.S. Dollar Bulls should be very happy.
As shown on a Daily Chart, the ICE U.S. Dollar Index stays comfortably at levels above the psychologically-significant level of 100.00.
Source: GAIN Capital, TradingView
In fact, it is trading at levels above both 20-day and 50-day moving averages.
In case a third attempt to break above the Overhead Resistance at 101.00 (previous two attempts were made in April) results in a success, the next Resistance at 103.00 (year-to-date high seen in March) would come into sight.
Only a return to the Key Support at 98.55 would bring about a Bearish Reversal.
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