Key Points:
- The US Dollar Index (USDX) trades near 103.22, moving sideways after Fed’s meeting.
- Powell maintains two rate cuts in 2025, providing some reassurance.
- Market reacts positively to Powell’s comments, lifting stocks, but the dollar remains muted.
USDX Moves Sideways After Powell’s Comments
The USDX (US Dollar Index) remained muted following Jay Powell’s comments at the Federal Reserve’s meeting. Trading around 103.22, the USDX showed little reaction to the Fed’s decision to keep rates steady.
Powell confirmed that two rate cuts are planned for 2025, which helped ease some concerns in the broader market. However, the greenback’s performance remained subdued, continuing its range-bound movement as the market waits for further signals.
Powell’s Rate-Cut Commitment and Market Sentiment
Despite uncertainty over Trump’s tariff policies, Powell reiterated that most Fed officials still expect two rate cuts next year. This message helped lift stock markets, with the three major US indices rising after Powell’s remarks. The broader market appeared to embrace the possibility of lower borrowing costs, but the dollar was left largely unaffected. The USDX showed little movement after Powell’s press conference, trading in a tight range, while equities enjoyed their best Fed-day rally since July.
USDX Technical and Market Outlook
Picture: SDX tests resistance at 103.271 after climbing from 102.814, as seen on the VT Markets app.
USDX increased by 0.20%, closing at 103.221 after opening at 103.01. The session saw a sharp upward movement, reaching a high of 103.544 before retracing slightly.
The moving averages (MA 5,10,30) show bullish momentum, with short-term MAs consistently above the longer-term moving averages. This indicates a sustained upward trend. Additionally, the MACD (12,26,9) shows strong bullish momentum as the histogram is expanding and the MACD line (blue) is above the signal line (yellow).
Key levels to monitor include 103.271 as immediate resistance and 102.814 as key support. A break above resistance could signal further upside momentum, while a drop below support may shift the sentiment to a more neutral or bearish bias.
The US dollar remains under pressure despite Powell’s rate-cut signals. Key levels to monitor include 103.271 as immediate resistance and 102.814 as key support. A break above resistance could signal further upside momentum, while a drop below support may shift the sentiment to a more neutral or bearish bias.
However, broader uncertainty regarding global trade policies and the Fed’s long-term approach to rate cuts continues to weigh on the greenback. The USDX’s next significant move will likely depend on further clarification from the Fed and the evolution of geopolitical risks such as the ongoing Middle Eastern conflicts.
