US Dollar Price Forecast: DXY Holds Firm on Iran Tensions – Will GBP/USD and EUR/USD Break Key Levels?

DXY: Safe Haven Demand Still Holding Up

US Dollar Index is still hanging around 98.60-98.70, picking up a bit as US Iran talks stall and Strait of Hormuz shipping disruptions keep investors flocking to safer assets. March inflation numbers were higher than expected though at 3.3% YoY (up from 2.4% previously), largely due to a 12.5% spike in energy costs which is just another nail in the coffin for hopes of slowing inflation. Markets are pretty sure the Fed will keep rates on hold at 3.50-3.75%, with anything Powell says about energy concerns and the data he sees as key.

Euro: Another ECB Hold on the Cards

EUR/USD is hovering just above 1.170-1.172 as everyone waits to see what happens when the Fed makes its decision today. The ECB is expected to leave its interest rates at 2.00% on April 30. Eurozone growth is only staying moderate ( forecasted to be 1.1-1.3%) and prices aren’t budging much either, staying stuck at 2.0-2.2% despite the pain of rising energy costs. Geopolitical jitters are still holding the euro back, even though it might get a bit of help from interest rate differences.

Pound: BoE Tread Water Between Inflation and Labour Data

GBP/USD is bunched up just above 1.350-1.352. March UK inflation numbers came in as expected at 3.3% YoY, with the core rate at 3.1% as well. The BoE is expected to keep rates at 3.75% on May 1, trying to balance out the inflation hit from energy costs with the fact that unemployment is slowly coming down to 4.9%. Britain is actually looking a bit more resilient than the eurozone which helps to provide some floor under the pound.

DXY Outlook: Rejection Below 99.00 Keeps Bearish Pressure Intact

The Dollar Index is stuck at 98.73, consistently failing to hold onto gains below that trendline that’s been kicking it back all day. The 98.80-99.00 zone is like a magnet – it’s where previous support turned resistance and just refuses to let the Index get past it. As a result price is stuck floating in no mans land between the 50 EMA and the 200 EMA – and that’s a pretty fragile recovery if you ask me, especially within a bigger bearish setup.

You see a rejection wick poking its head up near 99.20 and that tells me the sellers are still waiting in the wings to pounce. RSI is hovering around mid-levels and its a pretty good sign that there’s not much conviction on either side of this trade.

If the DXY can’t break above 99.00 then I think we’re looking at a decent chance of it sliding down to 98.20 & 97.80. But if – and it’s a big if – it manages to break above 99.20 then I think you’ll see a shift in the sentiment – with a chance of a run up to 100.00.

GBP/USD Forecast: Consolidation Near Trendline Signals Breakout Setup

GBP/USD is still stuck near 1.3500 – and that’s not really moving much – but it has managed to hold its ground above that trendline its been gravitating towards since April and also keep an eye on the 50 EMA. You’ve got to hand it to the bulls – they’ve managed to put in a series of higher lows since April and that’s a pretty good sign of underlying strength even if the price itself has been stuck in neutral.

There’s not a lot of room to get excited about at the moment – the resistance level is at 1.3550-1.3580 and that’s been putting the brakes on any real upside attempts. RSI is stuck right in the middle of the pack – and that suggests to me that neither side has got any sort of solid grip on this one.

If the trendline support around 1.3485 holds up then you might have a breakout waiting in the wings – and that could open the door to 1.3650. But if things start to break down & we do get a break below 1.3480 then I think the bullish outlook is on shaky ground and you might see a quick slide to 1.3430 and 1.3380.

EUR/USD Analysis: Rising Trendline Faces Pressure Near Resistance

The EUR/USD pair is stuck around 1.1700, clinging on just above its rising trendline that’s been the safety net since April. But looking at it from the other side of the coin, it’s not really moving in a straight line & that tells me the buyers are starting to lose steam near that key resistance level.

It’s a bit of a balancing act at the moment – price is hovering just above the 50 EMA while the 200 EMA below is still there to catch it if it falls. RSI is slowly drifting downwards from mid-levels – and that’s a pretty clear sign of the buyers losing their grip.

If we do get a break below 1.1680 then I think it will be a quick slide to 1.1645 and 1.1575. On the other hand a clean break above 1.1750 and you might be on the verge of reviving those bullish feelings and exposing 1.1800 and 1.1850