US Dollar Price Forecast: Dollar Strengthens as Rate-Cut Hopes Fade — GBP/USD Crumbles, EUR/USD Tested?

Dollar Strengthens as Inflation Data Clouds Rate-Cut Outlook

The U.S. dollar advanced against a range of major currencies on Monday, May 19, 2026, following April’s above-forecast inflation readings, which bolstered fears over persistent inflation and lowered expectations for Federal Reserve rate cuts in the coming months. The report pointed to the persistence of high costs in the crucial housing-shelter category and a partial recovery in oil prices following the suspension of hostilities with Iran under a conditional ceasefire. Even so, oil exports from Iran appear to be resuming through the Strait of Hormuz.

Against the backdrop of a strengthening dollar and uncertainty over the European Central Bank’s policy direction, the euro slipped in trading. The pound traded in a muted way against the U.S. currency, amid mixed UK economic data and continuing questions around global growth prospects, reflecting Bank of England chairman Andrew Bailey’s reliance on data for his next move.

On a different front, President Trump’s summit in Beijing, China, with Chinese President Xi Jinping continues, with observers keenly watching any outcomes on trade, technology and a possible cooperation in the Middle East on the Iran front. Even if the ceasefire agreement removed some of the dollar’s bid for geopolitical tensions, April’s inflation data is serving as a reminder that there is no quick path to U.S. rate cuts.

DXY Rips $99.13 is a Blue Ascending Channel Breakout!

The DXY traded at 99.13 on the 4h chart after a powerful green engulfing candles broke above red 50 period MA around 98.80 and the white descending trendline! This is now a clean breakout to the new blue ascending channel, featuring clear higher highs/lows from the lows in May!

This latest bullish continuation just cleared the 99.00 pivot and the RSI moved above 55 to indicate a momentum shift! The Fib extension from April sets a new zone of interest at 99.40 to 99.66 as price resistance! The volume profile shows buyers taking control with 98.80 becoming a new dynamic floor! Above 98.94 is bullish and now we’re just a clean breakout in the channel!

Trade Idea: Buy 99.13, target 99.66, stop 98.80!

GBP/USD Crumbles 1.3407 is a Rising Channel Breakdown!

The GBP/USD traded at 1.3407 on the 2h chart after the red candles broke below white ascending trendline support and the 0.382 Fib level near 1.339! The recent break down from the 1.360 high is bearish continuation, now printing lower lows with distribution wicks!

The red MA at 1.345 is a new dynamic overhead resistance, and the RSI just went below 50 as a sign the bullish momentum has run out! The volume profile confirms 1.344 as a failed fair value, with the next support at 1.335 to 1.339 cluster! Structure flips bearish below 1.341 while rejecting channel!

Trade Idea: Sell 1.3407, target 1.335, stop 1.344!

EUR/USD Holds 1.1638 is Blue Trendline Support Tested!

The EUR/USD traded at 1.1638 on the 2h chart after the green rejection candles defended the blue ascending trendline that started in mid-April’s lows near 1.162! Price is currently respecting the 0.236 Fib level at 1.1635, while the mixed candles are indicative of absorption by buyers despite the red MA hovering around 1.172 as overhead resistance! Higher lows from the April lows are in place, while lower highs are currently in play!

The RSI is hovering around 48 to show neutral momentum, and the volume profile confirms 1.165 as a supply area! Resistance sits at 1.1678 to 1.172, as 1.162 is our pivot point, which is now a higher low to form the rising channel! Structure neutral above 1.162 while testing rising channel floor!

Trade Idea: Buy 1.1638, target 1.1678, stop 1.1615!