US Dollar Forecast: Rises Ahead of Powell’s Jackson Hole Speech, GBP/USD and EUR/USD

Market Overview

During early U.S. trading, the U.S. Dollar Index (DXY) hovered in the low 98.00s, supported by fresh labor market data. Weekly initial jobless claims rose to 235K for the week ending August 16, surpassing both forecasts of 225K and the prior week’s 224K. The 4-week moving average climbed by 4.5K to 226.25K, signaling a modest increase in labor market slack.

Dollar Supported by Labor Market Signals

Continuing claims advanced by 30K to 1.972M for the week ending August 9, while the seasonally adjusted insured unemployment rate held steady at 1.3%. The uptick in unemployment claims was interpreted as a reason for the Federal Reserve to maintain caution on rate cuts, keeping the U.S. Dollar in demand.

Market Focus on Economic Data

Investors now turn to upcoming flash PMIs, the next jobless claims release, and the Philadelphia Fed Manufacturing Index for clearer signals on economic momentum. These reports are likely to guide short-term moves in both the Dollar and safe-haven assets such as gold.

Powell’s Jackson Hole Address in Spotlight

Despite recent labor data, the market’s main focus remains Federal Reserve Chair Jerome Powell’s speech at Jackson Hole. His remarks are expected to clarify the Fed’s rate-cut outlook and shape U.S. Dollar sentiment in the weeks ahead.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is trading around 98.74, showing strength after breaking above the descending trendline that capped price since late July. The breakout is reinforced by price holding above both the 50-EMA (98.29) and 100-EMA (98.28), now acting as near-term support.

Momentum is improving, with the RSI at 67 approaching overbought levels but still suggesting room for additional upside. The current structure highlights higher lows, signaling steady accumulation by buyers.

If the index sustains above 98.60, the next resistance lies at 99.32, followed by 99.72. On the downside, immediate support rests at 98.08, with a deeper pullback exposing 97.63.

GBP/USD Technical Analysis

The British pound trades near $1.3408, extending its decline after slipping below the channel support. The 50-EMA ($1.3470) and 100-EMA ($1.3458) now act as resistance, keeping pressure on the pair. The RSI at 35 signals bearish momentum, approaching oversold territory, suggesting potential for limited downside before a corrective bounce.

Immediate support lies at $1.3329, with a deeper move exposing $1.3262. On the upside, recovery attempts face hurdles around $1.3458–$1.3470, where moving averages converge.

The bias remains bearish as long as GBP/USD holds below $1.3460. A sustained drop under $1.3329 could confirm further weakness, while only a strong close back above the EMAs would signal stabilization and possible recovery.

EUR/USD Technical Forecast

The EUR/USD trades near $1.1594, slipping below trendline support and signaling downside momentum. Both the 50-EMA ($1.1645) and 100-EMA ($1.1641) now act as resistance, reinforcing bearish bias. The RSI at 35 shows weakening momentum, edging closer to oversold but with room for further declines.

Immediate support rests at $1.1528, with a break lower exposing $1.1472 and $1.1405. On the upside, recovery attempts face strong resistance around $1.1640–$1.1672, where moving averages and prior consolidation converge.

The structure favors sellers as long as EUR/USD holds below $1.1640. A sustained move under support levels could confirm bearish continuation, while only a decisive close above the EMAs would shift momentum back toward buyers.