US Dollar Index Forecast: DXY Holds 98.80 Before US GDP as EUR/USD, GBP/USD Stall

Market Overview

During the European trading hours, the broad-based US dollar gained some traction amid easing geopolitical tensions between the US and Europe. As of now, the US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against six major currencies, is trading around 98.80.

Traders seems hesitate to place any strong bid ahead of key US economic releases, including weekly Initial Jobless Claims, GDP Annualized, and Personal Consumption Expenditures (PCE) inflation data.

Easing US-Europe Tensions Supports the Dollar

However, the US dollar received support as geopolitical tensions between the United States and Europe showed signs of easing. As per the latest reports, the US President Donald Trump indicated he would step back from imposing tariffs on goods from European nations.

As we know, Trump had threatened new 10% tariffs on eight EU countries, which had raised concerns of broader trade conflicts. but now he is saying that the United States and NATO had “formed the framework of a future deal regarding Greenland.” Although the details remain unclear, this development reduced uncertainty and provided some upward momentum for the dollar.

Fed Rate Speculations Keep Dollar Firm

In addition to easing geopolitical concerns, the US dollar is supported by ongoing speculation about Federal Reserve (Fed) monetary policy. Fed officials have indicated that there is little rush to cut interest rates unless inflation clearly moves toward the 2% target. However, the market still expects a total of 50 basis points in rate cuts later this year.

Consequently, the calmer geopolitical news and cautious Fed expectations is helping the dollar to stay above the 98.80 level.

The US Dollar Index is trading around $98.80, after a sharp pullback from the kinda eye-watering $99.50 peak. On it’s 2 hour chart, the price has finally bounced off that rising trendline that’s been at $98.25 for a while now – a real magnet for buyers time and time again.

It’s hard to say what the overall structure is doing just yet – the price is still below that trendline from back in January, which has been acting like a lid on the price around the $99.02 – $99.28 zone. We’ve also got the 50-day EMA rolling over, while the 200-day EMA is just sitting there below $98.70 – pretty much acting like a little support cushion.

Trade idea: Consider selling rallies below $99.00, with a target of $98.25 and an exit if the price punches above $99.50.

GBP/USD Technical Analysis: Stalls Near $1.3430 as Descending Trendline Caps Upside

GBP/USD is trading around $1.3430, moving sideways after failing to break a long-term descending trendline drawn from the December highs. On the 2-hour chart, recent candlesticks show mixed bodies and frequent upper wicks near $1.3450, highlighting supply pressure as buyers struggle to regain momentum. The broader structure remains range-bound, with price oscillating between $1.3390 support and $1.3515 resistance.

The 50-EMA and 200-EMA are converging near $1.3420–$1.3440, reinforcing near-term indecision. RSI is holding near 50–55, signaling balance rather than trend strength. A sustained break above $1.3460 could open a path toward $1.3550, while rejection risks a pullback toward $1.3340.

Trade idea: Buy a breakout above $1.3460, target $1.3550, stop below $1.3390.

EUR/USD Technical Analysis: Reclaims $1.1690 as Channel Breakout Faces First Test

EUR/USD is trading near $1.1690, consolidating after a sharp rebound from the $1.1575 low. On the 2-hour chart, price has broken out of a descending channel and is now holding above a newly formed rising trendline, signaling a short-term shift in structure. Recent candlesticks show smaller real bodies with upper wicks around $1.1720–$1.1740, pointing to hesitation as buyers test supply.

The pair is holding above the 50-EMA near $1.1675, while the 200-EMA around $1.1650 remains key dynamic support. Fibonacci retracement from the January low highlights $1.1695 (38.2%) and $1.1672 (50%) as important demand zones. A cluster of resistance sits near $1.1725–$1.1760, where prior supply capped gains.

Trade idea: Buy dips near $1.1670, target $1.1760, stop below $1.1620. (edited)