US Dollar Price Forecast: Dollar Steadies Before Daly, Musalem Talks — GBP/USD and EUR/USD

Market Overview

The US Dollar Index (DXY) traded around 99.60 early Monday after ending last week slightly lower, as traders assessed softer US data and awaited several Federal Reserve speakers.

On Friday, preliminary University of Michigan (UoM) data showed consumer sentiment at 50.3, below expectations of 53.0 and marking a steady decline from 53.6 previously. Inflation expectations, however, edged higher to 4.7% from 4.6%, reinforcing uncertainty over the Fed’s next policy move.

Friday’s Economic Recap

Weak German and French trade figures weighed on the euro, while the US Consumer Credit report surprised to the upside at $13.1bn versus the $10.4bn forecast, signaling resilient spending.

Despite this, dovish tones from FOMC members Jefferson and Williams capped dollar gains, as investors grew more confident that rate cuts may arrive in early 2026 if disinflation persists.

Key Events Ahead

Today’s focus shifts to several central bank speeches. The UK’s MPC member Lombardelli and ECB’s Sentix Investor Confidence reading (forecast -3.9 vs. previous -5.4) could set the tone for European currencies.

In the US, FOMC members Daly and Musalem are scheduled to speak later in the session, followed by the Cleveland Fed Inflation Expectations, last recorded at 3.5%.

Overall, the dollar remains steady but vulnerable to dovish commentary, with traders closely monitoring inflation expectations for confirmation of a softer Fed outlook.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index (DXY) is hovering around 99.59, holding just above the 50% Fibonacci retracement at 99.46 after slipping from recent highs near 100.35. The price has broken below its short-term ascending channel, suggesting weakening bullish momentum.

The 20-EMA is flattening, while the RSI near 40 signals a lack of strong directional bias. If DXY holds above 99.46, it could attempt a recovery toward 99.94 or 100.35.

However, a sustained drop below 99.25 may open a deeper move toward 99.00 or 98.57, where the 200-EMA provides structural support.

GBP/USD Technical Analysis

The GBP/USD pair is trading around $1.3159, struggling to extend gains after testing resistance near the descending trendline from mid-October. The price remains below the 20-EMA and 200-EMA, indicating that bearish pressure is still present, though short-term momentum has improved.

The RSI near 60 reflects mild bullish sentiment, suggesting room for further upside if buyers defend the $1.3120 area. A confirmed breakout above $1.3170 could open the path toward $1.3245, while failure to hold above $1.3075 may trigger a pullback toward $1.3009.

EUR/USD Technical Forecast

The EUR/USD pair is trading near $1.1565, consolidating below a descending trendline drawn from the mid-October highs. The pair briefly tested $1.1582 resistance before retreating, while the 20-EMA acts as dynamic support around $1.1540.

The RSI has eased from overbought levels but remains above 50, hinting that buyers are still in control. A sustained move above $1.1580 could pave the way toward $1.1630, where the 200-EMA aligns with prior swing highs.

On the downside, a drop below $1.1525 would expose the next support at $1.1465.