US Dollar Price Forecast: Dollar Strengthens as Truce Enters Week 8 — Can GBP/USD and EUR/USD Hold?

Dollar Firms as Sticky Inflation Reinforces Cautionary Fed Outlook under Chair Warsh

The U.S. dollar rose slightly on May 28, 2026, as fresh data showed April’s Consumer Price Index came in hot, reinforcing skepticism that Fed rate cuts are close at hand under the leadership of chair Kevin Warsh. Higher shelter costs and a recent recovery in energy prices throughout the year were key factors in today’s print, though U.S.-Iran ceasefire deals have allowed crude supply routes through the Hormuz strait to partially reestablish.

Meanwhile, the euro was also pressured by the stronger U.S. dollar and diverging messages from the European Central Bank about the path forward for its interest rate policy, while the British pound similarly traded in a more muted range given that the Bank of England continues to take a wait-and-see approach to its next policy move with conflicting signals on the UK’s economic outlook and unsettled geopolitical risks abroad. In addition, the U.S. is currently enjoying reduced demand from the greenback as a safe-haven investment in the face of a conditional ceasefire deal with Iran.

In today’s inflation print, though, it is a gentle reminder to markets that the Fed’s interest rate path remains open to the data at this point. Markets will be looking at the Federal Reserve’s next moves and statements, plus economic data, to determine currency trends in the near term, while President Trump’s summit meeting with Chinese president Xi Jinping also plays into these calculations, given the relatively low level of breakthroughs on trade and technology matters.

DXY Holds $99.07 – Blue Ascending Channel Breakout Steady

On the two-hour chart, DXY’s green rejection candles successfully protected the blue ascending channel baseline and the red 50-period moving average around the $98.90 level. The price has formed a series of higher lows, with bullish body candles breaking through the $99.00 pivot point, while simultaneously testing the white descending resistance from April.

The RSI has ticked above 52, suggesting positive momentum without indicating an overbought condition. Looking ahead, the Fib retracement from the May swing suggests a resistance cluster at $99.17 to $99.36. The $98.97 level acts as a strong dynamic support based on volume profile, indicating that buyers are soaking up the available supply in the area.

The market is bullish above $98.97 as it ascends a clean breakout channel towards $99.41 to $99.51, while higher lows remain established within the short-term trend.

Trade Idea: Buy $99.07 targeting $99.36, stop $98.80.

GBP/USD Climbs to $1.3454 – Rising Channel Floor Defense

The GBP/USD price is at $1.3454 on the two-hour chart after green wicks upheld the white ascending trendline and the 0.382 Fib level near $1.339. A red moving average just below $1.345 is providing resistance, though the series of higher lows is intact inside the channel.

There has been some indecision recently, with mixed price action indicating that buyers are taking over when price touches the support line. The RSI is around 52, with no immediate indication of strength or weakness. $1.339 is the level to watch on the Volume Profile.

There is likely to be resistance in the $1.348 to $1.353 cluster. The market is bullish over $1.339, moving up a clean rising channel.

Trade Idea: Buy $1.3454 targeting $1.353, stop $1.339.

EUR/USD Rejects $1.164 – White Descending Trendline Pressure

On the one-hour chart, EUR/USD price is at $1.1642 after red candles were halted by the white descending trendline and red moving average at around $1.166. Red candles are making a series of lower highs on their wicks as they distribute on the way down while staying above the blue rising channel at $1.158.

RSI is now below 48, suggesting a further drop. $1.162 is a significant level on the volume profile. Look for support in the $1.158 to $1.156 Fib cluster. The overall structure is weak below $1.166 as it is probing the rising channel floor as part of a larger downtrend.

Trade Idea: Sell $1.1642 targeting $1.158, stop $1.166.