US Dollar Forecast: Safe-Haven Demand Keeps DXY Firm Near 99.50 – GBP/USD and EUR/USD

Market Overview

The US dollar regained some strength during early European trading, trading near 99.50 after the US government reopened following its longest shutdown in history. President Donald Trump signed a funding bill after a 222-209 House vote, ending weeks of uncertainty that had dampened investor sentiment.

The news provided a short-term lift to the greenback as traders responded to the resolution of the fiscal impasse.

Economic Data Backlog Adds to Market Uncertainty

While the reopening restores government operations, delays in key economic data remain a concern. Officials warned that several reports, such as October’s jobs and inflation figures, may never be published.

Economists expect the upcoming data to show slower growth, reinforcing expectations of a December Fed rate cut, with futures markets pricing in a 64% chance.

Fed policymakers remain split: Governor Stephen Miran believes policy is too restrictive given easing housing costs, while Atlanta Fed President Raphael Bostic prefers to hold rates steady until inflation clearly returns to the 2% target.

Traders Focus on Fed Commentary

Market attention now shifts to remarks from Neel Kashkari, Alberto Musalem, and Beth Hammack, which could shape rate expectations. Hawkish comments may lift the dollar, while dovish tones could trigger short-term weakness.

Despite the uncertainty, the dollar remains firm, supported by safe-haven demand amid global economic risks.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index (DXY) is trading near 99.37, staying within a downward channel that has contained price action since early November. The index faces resistance near 99.68, where the upper boundary of the channel aligns with the 20-EMA, while support rests around 99.30 and 98.95.

The RSI is hovering near 40, showing weak momentum but not yet oversold. A break below 99.30 could extend losses toward 98.57, while recovery above 99.70 may trigger a short-term rebound toward 100.00.

GBP/USD Technical Analysis

GBP/USD is trading near $1.3140, showing mild recovery after finding support around $1.3090. The pair remains capped by a descending trendline and the 50-EMA, which continue to limit upside momentum.

The 20-EMA is also trending below the 200-EMA, reflecting sustained bearish structure. The RSI has bounced from 35 but remains below 50, suggesting limited buying strength for now. A clear move above $1.3180 could open the door to $1.3230, where stronger resistance awaits.

On the downside, a drop below $1.3090 could expose the next support at $1.3050 or $1.3020.

EUR/USD Technical Forecast

EUR/USD is trading near $1.1608, breaking above a descending trendline that has capped gains for several weeks. The pair found solid support around $1.1564, where the 20-EMA and ascending trendline intersect, signaling strengthening bullish momentum.

The RSI has moved above 60, suggesting growing buying pressure without being overextended. If price sustains above $1.1620, it could open the path toward $1.1669 and $1.1715 resistance levels. On the downside, a close below $1.1560 would weaken the breakout signal and expose the pair to $1.1528.