US Dollar Price Forecast: Declines Ahead of ADP and PCE Data — GBP/USD and EUR/USD

Market Overview

The US Dollar softened in early European trading after fresh data confirmed a deeper contraction in US manufacturing activity. The Institute for Supply Management (ISM) reported that the Manufacturing PMI dropped to 48.2 in November from 48.7 in October, undershooting expectations of 48.6.

This marks the ninth straight month below the 50 threshold, underscoring persistent weakness across the industrial sector and signaling slower demand conditions heading into year-end.

Softer PMI Strengthens Rate Cut Expectations

The weaker data has amplified expectations that the Federal Reserve may adjust policy at its December meeting. According to the CME FedWatch Tool, futures now imply an 87% probability of a rate cut on December 9–10, compared with 71% just one week earlier.

Markets appear increasingly sensitive to signs of cooling economic momentum, with investors positioning for additional support measures aimed at stabilizing growth.

Markets Await Key US Data and Fed Signals

Attention now turns to upcoming US releases, including consumer sentiment and labor market indicators, which will help shape expectations for the Fed’s next steps. The USD is likely to remain sensitive to incoming data as traders reassess the economic outlook.

Market participants also await the Fed’s December policy statement and any guidance from officials, which will likely influence short-term currency moves and broader risk sentiment.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index is trading near $99.40 inside a descending channel, reflecting a controlled bearish structure. Overhead resistance lies at $99.60, then $99.82 and $100.08. Key support rests at $99.10, followed by $98.76 and $98.56 near the channel floor.

Price remains below the 50-EMA ($99.53) and 200-EMA ($99.62), confirming persistent downside pressure. Recent candles show repeated upper-wick rejections along channel resistance, signalling active selling on each recovery attempt.

RSI hovering around 42 shows weak momentum but mild rebound attempts. A break above $99.82 would be the first sign of stabilisation, while failure to hold $99.10 risks continuation toward the lower boundary of the channel.

GBP/USD Technical Analysis

GBP/USD is trading near $1.3215, holding within a rising channel that has guided price action since late November. Resistance is seen at $1.3246, followed by $1.3310 and $1.3384 near the channel’s upper boundary. Support stands at $1.3190, the channel midline, with additional levels at $1.3168 and $1.3103.

Recent candlesticks show smaller bodies and longer upper wicks around resistance, indicating hesitation from buyers after last week’s strong advance. The pair remains above the 50-EMA ($1.3213) but still below the 200-EMA ($1.3178), creating a mixed but improving structure.

RSI near 49 signals neutral momentum. A move above $1.3246 would reopen upside potential, while a drop below $1.3168 risks a pullback toward the lower channel boundary.

EUR/USD Technical Forecast

EUR/USD is holding near $1.1610 inside a rising channel after rejecting the upper boundary at $1.1660. Immediate resistance stands at $1.1645–$1.1660, followed by $1.1710. Support sits at the channel midline near $1.1600, then $1.1577 and $1.1555.

Recent candlesticks show smaller bodies after the rally, indicating slowing momentum as price tests resistance. The pair remains above the 50-EMA ($1.1595) and 200-EMA ($1.1578), keeping the medium-term bias constructive. RSI near 57 suggests moderate strength without overextension.

A clean break above $1.1660 would signal another attempt at higher levels, while a drop below $1.1577 would expose deeper retracement toward the lower channel boundary.