US Dollar Forecast: Firms on Strong US Data and Trade Progress – GBP/USD and EUR/USD

Market Overview

The U.S. dollar began the week on solid ground, extending its recovery and holding firm above 97.40 on the Dollar Index (DXY). The greenback drew support from upbeat macro data, easing recession concerns, and renewed optimism around global trade negotiations.

Economic Resilience Supports Greenback

Recent U.S. data helped stabilize sentiment. Initial Jobless Claims and PMI readings surprised to the upside, easing fears of economic slowdown.

While headline Durable Goods Orders declined 9.3% in June, mainly due to a drop in aircraft orders, core figures pointed to steady manufacturing activity.

The 10-year Treasury yield hovered near 4.39%, signaling that investors expect stable growth while awaiting clearer guidance from the Federal Reserve.

Fed Policy in Focus Amid Political Pressure

Speculation surrounding the Fed’s next move intensified following President Trump’s unusual visit to the central bank, where he reiterated calls for rate cuts. Despite this pressure, Chair Jerome Powell has remained cautious.

According to a Reuters poll, most analysts expect rates to stay at 4.25%–4.50% during this week’s meeting, with a potential cut delayed until September.

Global Trade Progress and Diplomacy Boost Outlook

The dollar also benefited from U.S. trade progress with Japan, Indonesia, Vietnam, and the U.K., which helped ease global risk sentiment.

Investors are closely watching U.S.-EU negotiations and Monday’s plan, key events that could shape the international trade landscape and further influence dollar dynamics.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is trading near 97.67, holding just above short-term support at 97.52 after recovering from its recent low. Price has climbed back toward the 50-EMA (97.63) and is currently testing resistance near the 100-EMA (97.75).

A sustained move above these levels would put 98.18 and 98.52 back in focus. However, momentum is mixed as price hesitates near both moving averages. On the downside, if 97.52 breaks, the trendline support near 97.13 becomes the next key level to monitor.

The short-term outlook remains uncertain, with bulls needing a clean break above 97.90 to regain control.

GBP/USD Technical Analysis

GBP/USD is trading near 1.3436 after rejecting both the 50-EMA (1.3493) and ascending trendline support, signaling a short-term breakdown. The recent drop came after a failed attempt to break above 1.3517, with sellers regaining momentum.

Price is now consolidating just below key resistance at 1.3462, while support rests near 1.3376. A bounce above 1.3462 could reintroduce bullish momentum, but the structure favors bears as long as the pair trades below the converging EMAs.

If downside pressure persists, further losses toward 1.3331 and 1.3286 may unfold. A clear break above the descending resistance line is needed to shift the bias.

EUR/USD Technical Forecast

EUR/USD is trading around 1.1740, holding within an upward channel that has guided price since mid-July. The pair recently bounced off dynamic support near the 50-EMA (1.1728) and 100-EMA (1.1708), suggesting buyers are defending the short-term trend.

However, momentum remains neutral as price consolidates below the 1.1788 resistance zone. A close above that level could confirm bullish continuation toward the 1.1823–1.1861 region. On the downside, key support levels lie at 1.1720 and 1.1704.