US Dollar Forecast: Rises on Geopolitical Talks, Traders Eye Jackson Hole – GBP/USD and EUR/USD

Market Overview

The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, advanced for a second straight session in Asian trading Tuesday, hovering near 98.20.

The renewed strength followed U.S. President Donald Trump’s announcement of preparations for a trilateral meeting with Russian President Vladimir Putin and Ukrainian President Volodymyr

Zelenskyy Geopolitical Developments Bolster the Greenback

Dollar momentum was reinforced after Trump noted that Moscow had shown some willingness to discuss security guarantees for Ukraine. He also suggested that territorial negotiations may be necessary as part of broader peace talks. While Trump emphasized that no ceasefire is in place, his comments hinted at early dialogue that could shape future agreements.

Zelenskyy, meanwhile, underlined the need for lasting peace and confirmed new U.S. arms purchases, signaling closer defense cooperation with Washington. U.S. Secretary of State Marco Rubio added that Washington would work alongside European and non-European allies to support Ukraine’s security framework. These developments lifted sentiment, providing near-term support for the greenback.

Fed Policy Expectations Weigh on Outlook

Still, rate expectations continue to act as a counterweight. According to CME’s FedWatch Tool, traders assign an 84% probability to a 25-basis-point rate cut in September. Market focus now turns to Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium later this week, where clarity on the policy path could determine whether the dollar extends or loses momentum.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is consolidating at 98.03, moving within a descending triangle pattern that highlights indecision but leans toward potential downside pressure.

Price is capped by descending resistance near 98.31, while immediate support sits around 97.98, reinforced by the converging trendline. The 50-EMA at 98.04 and 100-EMA at 98.14 are nearly flat, confirming a lack of clear momentum.
The RSI at 49 is neutral, but recent lower highs suggest fading bullish strength.

A breakdown below 97.98 could expose 97.63 and 97.34 as key targets, while a breakout above 98.31 would open the door to 98.63 and 98.99. The narrowing structure signals a sharp move ahead.

GBP/USD Technical Analysis

The GBP/USD is trading at $1.3518, holding above a key ascending trendline near $1.3470, which aligns with the 100-EMA at $1.3490. This confluence reinforces support and keeps the broader uptrend intact despite recent retracement from $1.3592 resistance.

The 50-EMA at $1.3522 is acting as immediate resistance. A sustained break above this level would suggest momentum recovery, targeting $1.3592 and potentially $1.3652 if bullish pressure builds. On the downside, a failure to hold $1.3470 would expose the pair to $1.3445 and $1.3397.

The RSI at 45 shows modest recovery from oversold territory, hinting at possible stabilization before the next directional move.

EUR/USD Technical Forecast

The EUR/USD is holding steady at $1.1676, supported by a rising trendline near $1.1650, which aligns with the 50-EMA at $1.1673 and 100-EMA at $1.1651. This cluster of support strengthens the bullish case, keeping the broader uptrend intact despite recent pullbacks.

Momentum signals are balanced. The RSI at 51 is neutral but tilting upward from the midline, hinting at improving strength. Price action shows a sequence of higher lows, reinforcing bullish structure, though repeated rejections near $1.1724 remain a ceiling.

A breakout above $1.1724 could open the way toward $1.1785–$1.1834, while failure to hold $1.1650 risks a drop toward $1.1596. This inflection zone is pivotal for direction.