US Dollar Price Forecast: DXY Gains on Fed Hawkishness – Can GBP/USD and EUR/USD Hold?

Dollar, Euro & Pound Markets Today

The U.S.-Iran conflict and disruptions to the Strait of Hormuz are still causing all sorts of uncertainty which is keeping the dollar in a pretty safe place – think of it as people running to the dollar because they feel safe with it in times of trouble. As the US is actually a big exporter of energy, this means its worth more when oil prices are high, which makes other countries want to buy dollars even more. This all helps to calm down any expectations that the US Federal Reserve will cut interest rates anytime soon. The Fed has decided to leave things unchanged and it seems like they’re not as keen to cut rates as they used to be because of all the inflation risks from the rise in energy prices. – all of this is giving the dollar a bit of a boost against the other major currencies.

The euro is in trouble because it’s a big energy importer – so it’s getting hit hard by all the high fuel costs which are making it harder for businesses to make a profit and for governments to keep things running smoothly. The European Central Bank hasn’t changed interest rates but they are keeping a close eye on inflation and some experts think that if there’s a bigger impact from the energy price rise later on they might actually have to put them up. On top of all that, latest forecasts are looking a bit grim for 2026 which is only adding to the pressure on the euro. Although some countries are doing a bit to help keep things afloat, it’s just not enough to make a big difference.

Sterling has got the same energy worries as the euro does, but it’s also got some extra things to think about like what the Bank of England is going to do. In April, the interest rate stayed the same and one of the people who gets to decide these things even voted to put it up, because they think inflation might be stuck high for a bit. On the other hand, its a bit of a worrying time for the pound because we’re not seeing as much growth as we were and some people are getting a bit cautious with their spending. But, its also possible that the pound could get a bit more volatile because of how sensitive its is to what’s happening elsewhere in the world and all the things that affect the price of oil.

The fact that the Fed, ECB and BoE are all doing different things and the oil market is such a mess is likely to make currency prices all over the place for a bit longer.

US Dollar Index Forecast: DXY Struggles Below Trendline, Bearish Pressure Persists

The US Dollar Index (DXY) is stuck around 98.32 trying to muster a bit of a recovery after getting bounced off the descending trendline resistance. The price is still stubbornly stuck below the 200 EMA and the 50 EMA is finally starting to flatten, which is a sign that the momentum is really starting to run out of steam. The repeated failures to clear 98.80 are making it clear that there’s strong supply in the market right now and the bearish structure is really starting to take hold. With the RSI stuck at around 45, it’s clear that the bulls are struggling to get any real traction and the potential for a further drop is pretty clear.

If the DXY can’t hold above 98.60 then the downside could start to take over, targeting 97.73 and then 97.40. On the flip side, if it does manage to break above 99.00 then the mood would start to shift in favour of the bulls.

Trade Idea: We’re looking at shorting below 98.60 with a target of 97.70 and a stop-loss above 99.10.

GBP/USD Forecast: Pullback From $1.3650 Signals Short-Term Correction

GBP/USD is stuck at 1.3550 after getting rejected at the 1.3650 resistance zone which has left it with a clear lower high on the 2-hour chart. The price has slipped below the 50 EMA and is now testing the trendline support at 1.3500 and the 200 EMA is still lurking below which is keeping the bigger uptrend in play for now. The rejection wick near the highs is a pretty clear sign that there’s some serious supply pressure in play here and the RSI turning lower from 60 is a clear sign that the bulls are losing their grip.

If 1.3500 does get broken then the next level to watch is going to be 1.3448. On the flip side, if it can push above 1.3600 then we might start to see the bulls get back in control.

Trade Idea: We’re looking at shorting below 1.3550 with a target of 1.3450 and a stop-loss above 1.3620.

EUR/USD Forecast: Key Support Test at 1.1680 as Trendline Holds

EUR/USD is ambling along at 1.1710, trying to make its way back down towards a crucial support zone around 1.1680 which coincidentally is also where the ascending trendline and the 200 EMA meet. The pair got rejected at 1.1750 resistance and formed a lower high which is a clear signal that things are weakening for the bulls in the short-term. The 50 EMA has finally flattened out which is a sign that things are consolidating rather than just ploughing forward. With the RSI heading towards 45, it’s clear that the bulls are starting to lose their grip.

If EUR/USD does break down below 1.1680, then we can expect to see the 1.1657 and 1.1615 levels come into play. But if it can stay above that level then it might trigger a bit of a rebound towards 1.1750 and 1.1790.

Trade Idea: We’re looking at a long position above 1.1680 with a target of 1.1750 and a stop-loss below 1.1650.