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

Dollar Steady as Inflation Concerns Reinforce Warsh Fed Policy Outlook

The dollar was steady on 04 June 2026, underpinned by inflation concerns after stronger-than-expected Consumer Price Index data for April. Headline CPI at 3.8 percent and core CPI at 4.1 percent have led to lower expectations for interest rate cuts by the U.S. Federal Reserve near-term under Chair Kevin Warsh, in favor of a higher-for-longer policy stance.

The euro was hit by the strong dollar and the European Central Bank’s more accommodative stance, which appears supported by softer data from the Eurozone economies. The UK pound was mixed, following the Bank of England’s more data-dependent stance in the UK, with economic data in mixed territory, while global risk sentiment remained muted.

Meanwhile, the conditional ceasefire between the U.S. and Iran is now nine weeks, which has reduced demand for the U.S. dollar as a safe haven currency, although the inflationary environment underpins the greenback. The forex markets may continue to be volatile with investors awaiting more commentary from the Fed, upcoming economic data releases, and changes to the global economic landscape.

DXY Climbs to $99.46 – Blue Ascending Channel Breakout Gains Strength on 1h

DXY is now up to $99.46; the breakout above the blue ascending channel is gaining strength on the 1h.  Green continuation candles have gone above the blue ascending channel and the red 50 MA around $99.18. The bullish bodies have produced a higher high and a higher low. The rejection wicks are doing a good job of absorbing selling pressure around the $99.00 support level. The price has gone cleanly above the white descending trendline from earlier peaks. The RSI stands just above 52 in positive momentum with no overbought situation.

Looking at the volume profile, we can observe that buyers are aggressive at $99.00 to $99.18. This is the strongest support or dynamic floor at this moment. The next resistance zone according to Fib from recent peaks is around $99.55 to $99.72. Looking at the overall structure, the price has a bullish structure above $99.00 as it is trading within a clean ascending channel. The simple higher lows have kept the buyers in control when it dips.

Trade Idea: Buy $99.46 targeting $99.72, stop $99.18.

GBP/USD Steady at $1.3426 – Rising Channel Floor Defended on 1h

GBP/USD remains unchanged at $1.3426; the floor of the rising channel has been defended on the 1h. GBP/USD trades at $1.3426 on the 1h chart. Green rejection wicks have defended the white ascending trendline and the 0.382 Fibonacci level near $1.340. The red MA at $1.345 overhead is keeping dynamic resistance. However, the higher low within the channel has been holding nicely. The recent mixed candles show that buyers are absorbing selling at the floor after a small dip. RSI is near 52 and the momentum is neutral.

Looking at the volume profile, we can see that there has been demand coming at the support near $1.340. The next resistance zone according to Fibonacci levels from recent peaks is around $1.345 to $1.348. Considering the overall structure, we are seeing a bullish structure while the price is defending a clear rising channel above $1.340. Higher lows are still keeping the uptrend intact on this timeframe.

Trade Idea: Buy $1.3426 targeting $1.348, stop $1.340.

EUR/USD Holds $1.1608 – Blue Trendline Support Tested on 1h

EUR/USD trades at $1.1608 on the 1h chart. Green and red candles have gone to defend the blue ascending trendline near $1.158 after testing the lower supports. Bearish wicks indicate there were some sellers. But buyers are absorbing supply near this price level. The red MA around $1.164 is offering dynamic resistance. However, the price is not able to make a high. RSI is around 48, implying that the momentum is neutral and there is no divergence in the momentum.

Looking at the volume profile, we can see the $1.158 to $1.160 as key pivots. The next resistance zone according to Fib from recent peaks is around $1.164 to $1.166. Considering the overall structure, it remains neutral as the price is testing the floor of the rising channel within a broader downtrend after a recent pullback. It is not breaking out and the price is remaining in a range.

Trade Idea: Buy $1.1608 targeting $1.164, stop $1.158.