US Dollar Price Forecast: Dollar Sinks as Oil Fears Fade – Will GBP/USD and EUR/USD Hit New Highs?

Dollar Weakens as Iran Talks Lift EUR/USD and GBP/USD

The US Dollar index is drifting around the 98.00 – 98.20 mark, still under the pump due to the US-Iran diplomacy situation looking up. As hopes for a better outcome increase it seems less people are looking for the safety of the dollar. Tensions easing around the Strait of Hormuz have made oil prices come back down a bit – this has taken the heat off inflation fears and knocked the dollar back a bit even further. US data’s been a bit mixed and the Fed’s been playing it cool, which is only a tiny bit helping the dollar stay in the game but really its still being pretty cautious.

EUR/USD is hovering around 1.18, enjoying the dollar’s weakness and a general pick-up in the risk appetite out there. Lower oil prices are easing the pressure on the eurozone’s outlook and the ECB’s stuck to its script so far which has helped keep expectations steady. But even with all that the gains aren’t being all that wild because theres still a lot of uncertainty floating around.

GBP/USD is floating around 1.3560-1.3575 and benefiting from the same dollar weakness and a bit more optimism around the UKs economic situation. Sterling’s had a slight but not totally unexpected bump in the charts but still it’s not that far away from being a bit fragile – oil prices and global headlines can swing it either way.

Over all right now its a bit of a risk on phase but not too solid at the moment. If US and Iran talks hit a snag then it could switch the dollar’s flow pretty quick.

Dollar Index Slips Toward 98 Support – Breakdown or Rebound Ahead?

The US Dollar Index (DXY) is hovering around 98.20, still on the back foot after failing to hold onto the good stuff above 99.50-100.00. Price has just retested a key line on a rising trendline near 97.80-98.00 that looks an awful lot like a demand zone.

The charts are showing a worrying drop in bullish momentum – price is below the 50-day moving average and having a bit of trouble getting past the 200-day one at ~99.00. And on the RSI, it’s sliding down towards the mid 40’s, which isn’t quite oversold yet.

A break below 97.80 is really looking like it could be the kick in the teeth that sends price plummeting towards 97.00-96.50, whereas a rebound from there might see the dollar bounce back up to 99.00.

Trade idea: If you’re feeling bearish, sell below 97.80, target 97.00, and stop loss above 98.60.

GBP/USD Holds Gains Above 1.3500 – Pullback Within Uptrend

GBP/USD is cruising along at 1.3530-1.3560, after that big run it had that got price all the way up to 1.3590 highs. Trend is still looking pretty positive, with price holding onto it’s gains above the key Fib levels and rising line support.

That 0.236 Fib at ~1.3540 is acting as the immediate safety net right now, with a bit more support lurking at 1.3500-1.3480 further down. And on the RSI, price is still sitting pretty above the 50-day moving average, with some of that crazy overbought steam being let off.

If the bulls can just keep things above current levels, you might even see another pop up to 1.3590-1.3620. A proper break below 1.3500, though, and you could be looking at a bit of a pullback to 1.3460.

Trade idea: Looking to get back in? Buy near 1.3500, target 1.3600, and stop below 1.3460.

EUR/USD Near 1.1800 Resistance – Bullish Trend Faces Exhaustion

EUR/USD is sitting at 1.1770-1.1790, taking it easy just below a key trendline that’s had price bumping up against it at 1.1820. Despite the very short-term bounce, the overall trend is still up, with higher lows and a rising line on the chart to keep things feeling positive.

With price sitting comfortably above both the 50-day and 200-day SMAs, the wider trend is still looking all bullish, but price keeps getting knocked back down at 1.1800-1.1820 – that’s gotta be a sign of overbought, right?. RSI is also easing off those crazy high levels, so some momentum is cooling.

A clean break above 1.1820 could maybe get things moving towards 1.1880-1.1900, but if price keeps getting rejected there, you might see a pullback to the lower end of support at 1.1710-1.1750.

Trade idea: Looking for a bounce? Buy above 1.1820, target 1.1880, and stop below 1.1750.