U.S. Dollar Tests Resistance As Markets Await GDP and Payrolls, Analysis For EUR/USD, GBP/USD

Market Overview

During Tuesday’s Asian session, the U.S. Dollar Index (DXY) climbed to around 99.14, buoyed by heightened trade friction and investor positioning ahead of key U.S. economic releases later this week.

Tariff Concerns Elevate Dollar Amid Diplomatic Stalemate

The Dollar’s gains are underpinned by renewed tension between the U.S. and China, as markets react to the lack of progress on tariff negotiations. President Trump’s administration is reportedly attempting to limit the scope of automotive tariffs by preventing increases on foreign-made vehicles and easing taxes on imported parts. However, the broader U.S.-China trade standoff shows little sign of resolution.

While U.S. Treasury Secretary Steven Mnuchin has confirmed ongoing communication with Chinese counterparts, no clear diplomatic movement has been reported.

The impasse is prompting a defensive market tone, with the Dollar benefiting from its perceived relative stability amid geopolitical risk.

Dollar Finds Support Ahead of GDP, Payrolls Data

Beyond trade policy, the market’s attention is shifting to incoming U.S. macroeconomic data. The first-quarter GDP print and April’s Nonfarm Payrolls report are expected to shape the near-term monetary outlook.

Despite speculation surrounding potential Federal Reserve rate cuts, the Dollar remains resilient. The CME FedWatch Tool shows that markets are pricing in a higher probability of cuts by mid-year, yet persistent labor market strength and solid consumption data continue to support the Dollar’s current levels.

Analysts are now assessing whether upcoming data will reinforce expectations of a more dovish Fed or prompt a delay in policy adjustments. Until then, the DXY is likely to remain sensitive to any surprises in economic indicators or trade-related developments.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is under renewed pressure, falling back to $99.14 after failing to hold above the $99.35 pivot. The move confirms a breakdown below both a short-term rising trendline and the 50 EMA ($99.35), suggesting bearish control in the near term.

Price had previously attempted a breakout toward $99.89 but was capped by the descending trendline intersecting with horizontal resistance. With the 200 EMA sitting much higher at $100.35, the broader trend remains clearly bearish.

If DXY fails to reclaim $99.35 soon, traders should watch $98.90 and $98.46 as the next downside levels.

GBP/USD Technical Analysis

GBP/USD is trading at $1.3417 after briefly testing resistance near $1.3445, a level that has capped upside twice this month. The pair remains in an ascending channel, supported by the 50 EMA at $1.3344 and the 200 EMA at $1.3210.

A short-term pullback toward $1.3355 looks likely, especially with price showing rejection wicks near the highs. If bulls defend that zone, a bounce back toward $1.3445—and possibly $1.3498—remains on the table.

Conversely, a break below $1.3355 could open the door to $1.3279. Momentum favors buyers, but the pair needs a clean close above $1.3445 to confirm bullish continuation.

EUR/USD Technical Forecast

EUR/USD is trading around $1.1390 after breaking out of its descending channel, signaling bullish intent ahead of the week’s key macro data. The pair is holding above the pivot at $1.1374, with near-term resistance at $1.1424, then $1.1481. Support rests at $1.1350, followed by $1.1320 and $1.1266.

The 50 EMA at $1.1380 is flat, while the 200 EMA at $1.1278 continues trending upward—providing a broader bullish bias. This bounce off support near $1.1350 adds weight to the idea that buyers are gaining confidence.

Still, a clean close above $1.1424 is needed to open the path toward $1.1545. Until then, it’s a wait-and-see play—momentum is there, but conviction needs to follow.