US Dollar Price Forecast: DXY Grinds Lower on Ceasefire Calm – Are GBP/USD and EUR/USD Set to Push Higher?

Dollar Weakens as Ceasefire Stability Boosts Risk Appetite

The US dollar eased up against the major currencies on May 7 2026 , as the ceasefire between Washington & Tehran that’s been holding for nearly a month now continued to hold, leading to less safe-haven demand for the greenback. And with tanker traffic slowly getting back on track through the Strait of Hormuz things are looking less hairy geopolitically, so investors are getting less nervous and moving more into riskier assets that will give them a bit of a return.

The euro’s doing a bit better now that people are feeling a bit more optimistic and think they’re going to have more energy stability on their hands in Europe , while the British pound is getting a bit more traction as its classic move when people get less nervous and the risk-on trade takes off – it’s always been the go-to currency when things look less gloomy around the world. And both are benefiting from that dollar premium taking a hit

Market focus is starting to turn towards the upcoming US inflation numbers, which will give us a better idea of what the Federal Reserve is going to be up to – and also get a look at the signals coming from the European Central Bank & The Bank of England, which are likely going in different directions. While the truce has taken the most of the threat of a dollar surge off the table , analysts are still warning that its all just hanging by a thread – if the talks fall apart the dollar could quickly go back to being the go-to safe-haven currency again.

DXY Grinds Lower Under White Trendline – $97.61 Support Still Looking Good At $97.85

DXY is sitting at $97.85 on the 2-hour chart and sliding along the lower blue channel with that red 50-period MA pretty much putting the lid on rallies at $98.10. We’ve got some red candles forming lower highs after DXY got rejected at $97.91 – that’s respecting the white trendline from those April peaks.

Price is still holding above that $97.61 horizontal support but it’s printing those bearish wicks which aren’t exactly filling you with confidence. RSI is hovering just above 48 giving a pretty weak look to the momentum. If we use the Fib retracement from that May swing then the next downside cluster looks like $97.29 to $96.94.

The volume profile is marking $98.10 as a real area of resistance – no surprise there. As long as DXY stays below $98.00 it’s still looking pretty bearish and is firmly stuck in a multi-week down-channel.

Trade Idea: Try selling $97.84 and see if you can hit $97.29, stop loss at $98.10 – sounds like a plan

GBP/USD Climbing Inside Rising Channel – $1.358 Floor Still Holding Firm

GBP/USD is at $1.3625 on the 2-hour chart and riding that upper blue channel line from late April – the green candles are pushing above that red MA near $1.360. Price is respecting that higher lows structure after holding $1.35872 support.

Got a nice bullish continuation pattern forming with the strong bodies rejecting lower prices. RSI is climbing towards 58 and that’s confirming positive momentum. If we’re heading for the next resistance then it looks like $1.365 to $1.367 from those recent highs.

The volume profile is highlighting $1.36 as a strong pivot zone. Overall it’s looking pretty bullish above $1.358 and as long as GBP/USD stays inside that clean rising channel then all’s good

Trade Idea: Why not buy $1.362 and see if you can hit $1.367, stop loss at $1.358.

EUR/USD Defends $1.177 – Blue Trendline Still Doing Its Job

EUR/USD is at $1.1771 on the 2-hour chart and defending that blue trendline from April lows – the green rejection candles after testing $1.174 were a pretty nice sight. That red MA near $1.177 is acting as a bit of a dynamic resistance while price is printing higher lows inside a short-term range.

That recent bullish hammer at $1.176 was a good sign for the buyers. RSI is above 52 with no divergence – so momentum is still looking pretty good. The Fib 38.2% retracement from that recent high is at $1.174 now and that’s being defended.

Got some resistance coming in above $1.178 to $1.183 from that prior swing cluster. Overall, it’s looking neutral-to-bullish above $1.174 while that channel floor is still providing solid support.

Trade Idea: Why not buy $1.177 and see if you can hit $1.183, stop loss at $1.174