Citigroup goes against the trend and is bullish on the US dollar: It has fallen to a key support level, with three major strengthening factors converging!

Recently, the market's expectations for a Fed rate cut have increased, causing the US dollar to continue to weaken. This month, the US Dollar Index fell by nearly 2.2% to 101.21 points, hitting its lowest level since January. As the US dollar weakens, analysts are bearish on the currency. However, Citigroup is going against the trend and remains bullish, believing that the US Dollar Index is currently approaching a key support level. If this level can be held, investors who are bullish on the US dollar will reap substantial returns. Citigroup further points out that there are three factors influencing the strength of the US dollar: EU economic data, Fed policy, and domestic political changes in the United States. Several Factors That May Influence the Strength of the US Dollar Citigroup analysts believe that the US Dollar Index is currently approaching a crucial support level, ranging from 100.30 to 100.82. This support level is formed by the lowest points from 2023 to 2024 and the 200-week moving average. Citigroup emphasizes that as long as the US Dollar Index remains above these levels, it will stay within a two-year range, providing an attractive scenario for those betting on a stronger US dollar. Analysts have pointed out several factors that may influence the strength of the US dollar. Firstly, Citigroup expects that EU economic indicators may weaken, such as the Purchasing Managers' Index (PMI) and wage data released this week. If these data indeed show weakness, the euro may further weaken, thereby relatively boosting the US dollar. According to the latest data from S&P Global and HCOB, Germany's PMI for manufacturing and services both fell below expectations. The Eurozone's August Manufacturing PMI came in at 45.6, hitting an 8-month low. Following the data release, the euro dropped by over 20 points against the US dollar, currently trading at 1.1128. This further confirms Citigroup's forecast. Additionally, Citigroup speculates that Fed Chair Jerome Powell may not lean more dovish than what the market has already priced in. If the Fed maintains a relatively hawkish stance, the US dollar may receive support. Lastly, they also mentioned that if Robert Kennedy withdraws from the presidential race and supports Trump, the "Trump trade" may receive a boost, which is often associated with a stronger US dollar. The latest news indicates that Robert Kennedy does indeed plan to end his independent presidential campaign and may support former President Donald Trump. Zero Hedge pointed out that negotiations are still ongoing, with a clear outcome expected by the end of this weekend. Trump stated that if Kennedy chooses to support him, he would consider offering Kennedy a cabinet position