US Dollar Price Forecast: Dollar Pauses Before Central Bank Week as UK Inflation Firms Hike Bets, DXY Tests 101.51

The dollar’s slide paused on Thursday as investors positioned for next week’s central bank meetings, while sterling is still drawing support from a hotter UK inflation print.

Dollar Index: Waiting for “Hawkish Holds”

The dollar’s decline took a breather as traders braced for next week’s meetings, where hawkish holds are expected in Japan, the US and Europe, Reuters reported. Currency markets are still long the dollar on the view that the AI boom keeps US growth strong and rates higher for longer. Recent gains in sterling and the Canadian, Australian and New Zealand dollars suggest some of those bets have been trimmed, though. For the Fed, nearly all economists in a Reuters poll expect a hold this month and a hike in December, so next week’s message matters more than the decision itself.

Euro: Stable, but Still the Preferred Short

The euro has slid for about a month and has become a favored way to bet on a stronger dollar, as France’s fiscal problems and Europe’s energy vulnerability attract short sellers. Even so, it has held steady in a tight range this week, which suggests much of the bad news is already in the price.

Pound: November Hike Nearly Fully Priced

UK inflation rose to 3.5% in September from 3.1%, above the 3.4% consensus, as motor fuel prices jumped 29.8% from a year earlier. Core inflation climbed to 2.8% from 2.6%. LSEG data show markets treating a quarter-point Bank of England hike to 4% on November 5 as near-certain, with four increases priced by the middle of next year. ING expects another move in February, while Capital Economics sees inflation peaking near 4.2% next year. That is why sterling has the firmest rate story of the three. ICAEW’s Suren Thiru said rising inflation turns next week’s Budget into a perilous high-wire act for the chancellor.

US Dollar Index Technical Analysis: DXY Tests 101.51 Support as Trendline Pressure Builds

The US Dollar Index is trading near 101.58 on the 2-hour chart, just above the 101.51 support zone that has stopped the declines over the past week. Each rebound from that floor has been weaker than the last. The descending trendline from the 102.94 spike keeps capping the bounces, and that pressure has pushed DXY below both moving averages.

If 101.51 breaks, the way opens toward 101.13 and then 100.87. On the upside, the dollar needs to clear the trendline near 101.75 and then 101.83 before 102.08 and 102.26 come back into view.

RSI is near 37 and below its signal line near 43, so momentum is bearish but not yet oversold. I lean slightly bearish while DXY stays below the trendline and 101.83. A close below 101.51 would strengthen that view, and only a sustained break above 101.83 would cancel it.

EUR/USD Technical Analysis: Euro Holds 1.1241 as 1.1270 Breakout Test Approaches

EUR/USD is trading near 1.1243 on the 2-hour chart, right at the bottom of the 1.1241 to 1.1270 resistance zone that has rejected the pair twice this month. The rising trendline from the 1.1113 low has produced a steady run of higher lows, and the faster moving average is rising beneath price. The slower moving average, however, sits inside the resistance zone and adds to the ceiling.

A clean break above 1.1270 would open the way for 1.1305 and then 1.1338. On the downside, 1.1241 and the rising trendline are the first support, followed by 1.1188 and 1.1148.

RSI is near 58 and above its signal line around 52, so momentum is improving as buyers test resistance. In my view, the pair stays neutral with a slight bullish lean while it holds above the trendline. A close above 1.1270 would confirm the breakout, while a drop below 1.1188 would hand control back to sellers.

GBP/USD Technical Analysis: Pound Holds 1.3364 as 1.3408 Remains the Key Breakout Test

GBP/USD is trading near 1.3398 on the 2-hour chart, inside the 1.3364 to 1.3408 zone that capped the pound in late September. Buyers have held price near the top of this range for two sessions. When a pair sits under resistance without falling back, it is usually building up for a break, and the moving averages support that view: both are rising below price, and the faster one has crossed above the slower one.

If 1.3408 gives way, 1.3447 and then 1.3497 come into play. On the downside, 1.3364 is the first support, followed by 1.3295, where the slower moving average sits, and 1.3229.

RSI is near 63 and moving in line with its signal line, so momentum is positive but has flattened at resistance. I would stay slightly bullish while GBP/USD holds above 1.3364. A close above 1.3408 would confirm the breakout, and a drop below 1.3295 would break the recovery structure.