US Dollar Price Forecast: DXY Rejects $98.59 After Hot CPI — Will GBP/USD and EUR/USD Drop Further?

Dollar Firms as Hotter Inflation Data Dampens Rate-Cut Hopes

The dollar rose on May 13, 2026, following a hotter-than-expected April Consumer Price Index that suggested inflation is stickier than previously thought and pushed down expectations for near-term Fed cuts. The report revealed persistent inflation from shelter and rising energy prices from earlier this year despite a U.S.-Iran ceasefire allowing some oil to flow again.

The euro fell on reduced odds for a dovish Fed and, to a smaller degree, the U.K. pound traded on cautious sentiment around a more dovish Bank of England. After weeks of the truce in the Middle East on a condition weighing against the safe-haven dollar, the April CPI put the market on alert that the road to lower rates still looks bumpy.

The dollar’s performance over the next few weeks will depend on whether soft data from the labor market outweighs any inflation stickiness that is already there, or if there are any more sticky prices. Should the economy deliver more soft prints than sticky inflation prints, then the market will once again get optimistic about Fed cuts later this year.

DXY Rejects $98.59 – White Descending Channel Ceiling Holds

DXY is changing hands at $98.54 on the 2-hour chart, and after having challenged the white descending trendline off the April highs and the red 50-period moving average just below $98.59, long upper wicks were printed. Green candles have formed in recent sessions; the bullish bodies were short and price couldn’t manage a breakout over the overhead resistance. The price did not break below the blue line at $98.09 and the horizontal base at $98.00 and the DXY made higher lows within the short-term consolidation pattern.

RSI is sitting near 52 and there is no sign of divergence in momentum. Fibonacci lines off the May swing high and low show the zone from $98.59-$99.07 as the upcoming barrier to the upside. Volume Profile indicates price is consolidating near $98.54, with sellers continuing to defend the top of the trendline.

DXY remains trapped in a range, confined to the multi-week descending channel below $98.59. Short at $98.54, take-profit at $98.09, stop-loss $98.59.

GBP/USD Pulls Back to $1.351 – Rising Channel Floor Tested

The GBP/USD is currently trading at $1.3513 on the 2-hour timeframe chart, and is testing the white ascending trendline from the early May low after selling off from the red moving average at $1.3535. The price was defended by the green wicks that defend $1.35099 Fib support.

A Fib line shows the level, which is intact as price remains in higher lows. Price is consolidating above $1.353, but the trendline has held. RSI is sitting around 52 and momentum is stable.

Resistance is at $1.3557-$1.3577, and volume profile shows $1.351 as the fair value gap with the buyers coming in. The price is rising, inside a strong ascending channel above $1.350. Long at $1.3513, take-profit at $1.3557, stop-loss $1.3500.

EUR/USD Holds $1.170 – Blue Ascending Trendline Support

The EUR/USD is changing hands at $1.1703 on the 2-hour chart and is holding the blue rising trendline drawn from the mid-April low while red and green candles reject the $1.169 low. The red moving average sitting at $1.172 is acting as dynamic resistance and the price is making higher lows off the Fib levels. The bullish hammer candle shows that buyers have shown interest in this area.

The RSI stays neutral near 50, with a flat momentum. Price is facing selling pressure from highs at $1.174-$1.178, as shown by the volume profile at $1.170. Structure neutral-to-bullish above $1.169 while riding clean rising channel support. Long at $1.1703, take-profit at $1.174, stop-loss $1.169.