US Dollar Price Forecast: Dollar Strengthens as Truce Enters Week 9 — Can GBP/USD and EUR/USD Hold?

Dollar Firms as Sticky Inflation Supports Cautious Fed Outlook

As of 1 June 2026 the dollar remains strong, buoyed by lingering concerns over inflation after April’s hot reading for CPI. With headline CPI 3.8% and core CPI 4.1% over the last 12 months, any expectation of the near-term Fed rate cuts under Warsh have been tempered further by recent data, and the dollar is expected to stay on a higher for longer path.

The euro is weighed down by the strong dollar and mixed signals on Fed policy while the European Central Bank signals a more accommodative stance as growth in the eurozone is weaker. The pound is held by the Bank of England who remain data dependent on the UK’s performance and mixed results from global developments.

The conditional truce between the US and Iran continues to have reduced some safe-haven demand for the US dollar, with the ceasefire now over 9 weeks old. However the positive impact is being tempered by inflation expectations with further volatility expected over the coming months.

DXY Steady at $99.03 – Red MA Rejection on 4h Frame

The US Dollar Index (DXY) is trading at $99.03 on the 4h chart. Mixed candles rejected the red 50MA (moving average) around $99.18 as well as the white descending trendline. Price has held the blue ascending trendline near $98.94 and printed higher lows on the 4h chart. The price prints rejection wicks near $99.19 resistance. RSI is hovering near 52. There is some light volume on the profile around $98.92 and price is bouncing off that support.

Looking back on the last week or two, the next cluster in the 23.6%-61.8% Fibonacci zone is around $99.19 to $99.35. The 50MA is capping upside firmly near the price pivot at $99.18. The structure is neutral to bullish and price is holding above $98.92 while consolidating in the short term timeframe after breaking out earlier in the week.

Trade Idea: Buy at $99.03 with target $99.35. Stop Loss: $98.92.

GBP/USD Climbs to $1.3460 – Rising Channel Floor Test on 1h

The Pound Sterling (GBP/USD) is trading at $1.3460 on the 1h chart. Green rejection candles defended the white trendline and 0.382 Fib around $1.343. There is a red MA near $1.345 overhead as price prints higher lows. RSI is hovering near 50 on the 1h chart.

There is some decent volume on the 1h profile around $1.343. The next resistance area is $1.348 to $1.350. The structure is bullish and price is defending the clean rising channel from the medium term timeframes on the 1h chart.

Trade Idea: Buy $1.3460 targeting $1.350, stop $1.343.

EUR/USD Holds $1.1649 – Blue Trendline Defense on 1h

The Euro (EUR/USD) is trading at $1.1649 on the 1h chart. Green candles defended the blue trendline and 0.382 Fib around $1.162. There is a red MA near $1.166 overhead as price prints lower highs. RSI is climbing above 48 on the 1h chart. There is some decent volume on the 1h profile around $1.162.

The next resistance area is $1.166 to $1.168. The structure is neutral and price is testing the rising channel floor on the 1h chart inside the medium term downtrend.

Trade Idea: Buy at $1.1649 with target $1.166. Stop Loss: $1.160.