US Dollar Price Forecast: DXY Holds $98.26 on Ceasefire Calm — CPI Data to Drive GBP/USD and EUR/USD?

Dollar Eases as Ceasefire Stability Boosts Risk Appetite

The dollar eased on Wednesday, May 12 2026, as the fragile U.S. ceasefire with Iran held steady over the course of more than a month since its inception and the tanker fleet slowly returned to navigate the Strait of Hormuz.

With the threat of the imminent outbreak of regional war abated, investors are rotating away from the U.S. dollar, the classic safe-haven, towards alternative currencies which tend to thrive in periods of rising global risk tolerance. The euro and the British pound, both of which benefited from a broader decline in the dollar’s defensive premium, were further beneficiaries of a weaker dollar. The former rose on improved sentiment and expectations of greater energy stability across Europe, and the latter as a classic beneficiary of reduced global uncertainty and stronger risk-on flows.

The market attention now turns to upcoming U.S. inflation data and Federal Reserve policy signals. However, any diplomatic setbacks or renewed tensions in the Middle East could quickly restore the greenback’s safe-haven status in the near term.

DXY Holds $98.26 – White Descending Channel Resistance Intact

At $98.26 on the 2H chart, the DXY has slid under a white descending channel that began from April’s high, where it’s being capped just under $98.50 by the red 50-period MA. Despite the small bullish candlestick body on green candles, the 2H chart has left a long upper shadow near the $98.27 level which maintains a lower-high pattern. However, this level of resistance is in place of a white descending trendline, but it still sits above a blue channel support line and the $98.09 level where it has a long-term base, all with higher lows intact inside short-term base.

With an RSI sitting at just shy of 52, the 2H chart’s RSI is neutral and lacks any divergence pattern. On the 2H chart, the most recent swing from May has a retracement area that sits in the $98.59 to $99.09 level as a key level to watch. However, volume analysis is telling us that $98.26 is an immediate pivot level which the sellers are still defending the channel resistance in this down trend. In short, the structure remains neutral as long as the 2H chart stays inside of a multi-week descending channel that sits under the $98.59 to $99.09 retracement target.

Trade idea: Long $98.26 targeting $98.59, stop $98.09

GBP/USD Defends $1.353 Rising Channel Floor

On the 2H chart, GBP/USD trades at $1.3530, which bounced off a white ascending trendline support line that started from a low of $1.3529. Here, the red 50-period MA sits just under the $1.355 level and is acting as immediate resistance to any further rally. However, the 2H price action has printed a series of higher lows with bullish candlestick wicks on the green candles that are defending a Fib level of confluence that sits inside of a blue channel floor. With the RSI currently above 50, the 2H price action on GBP/USD looks bullish.

As well as that, the 2H price action is sitting just under overhead resistance that started from a prior swing cluster that spans the $1.3557 to $1.3577 level. However, volume profile is telling us that $1.353 is a strong pivot level where buyers have been stepping into dips on the green candles. In short, the structure remains positive as long as the 2H price action is inside of this blue channel.

Trade idea: Long $1.3530 targeting $1.3577, stop $1.3520

EUR/USD Grinds $1.1745 – Blue Trendline Support Tested

On the 2H chart, EUR/USD is currently trading at $1.1745, and it is defending a blue ascending trendline that started from a mid-April low where it has formed a series of small mixed candlesticks which defend the $1.1739 level on its short-term base. Here, the red 50-period MA confluence sits just under the $1.176 level, which has become a dynamic resistance for a series of higher-lows in a short-term range. The 2H price action prints a series of bullish rejections wicks on recent green candles, which has confirmed that buyers are stepping in on these green candles. However, with the RSI currently staying neutral near 50, the 2H price action looks like it’s flat.

Overhead resistance on the 2H chart sits in place of swing highs that range $1.178 to $1.179. However, volume is telling us that $1.174 is a fair-value pivot where buyers are currently defending. In short, the structure remains neutral-to-bullish as long as the 2H price action holds a low which defines the blue channel floor.

Trade idea: Long $1.1745 targeting $1.178, stop $1.173.