US Dollar Price Forecast: DXY Rises on Iran Tensions – GBP/USD and EUR/USD Outlook: Slips?

Market Overview

The US Dollar Index (DXY) is currently trading in the 100.20-100.30 range, up a fraction of a percent over the past few days as it continues to build on its winning streak. It’s now up around 1.9% over the past month, largely thanks to renewed demand for dollars – as folks look to add some liquidity to their portfolios.

Despite all this, the index is still about 3.8% off its yearly peak. The fact that it’s rebounded all the way back from those early 2026 lows of around 95-97 really points to a shift in the way big players like hedge funds and pension funds are positioning themselves in the market – even if it is still sitting below its 52 week high of around 104.50.

Geopolitics and Oil – A High Pressure Mix

The ongoing spat between the US and Iran has really increased demand for the dollar. And with the Strait of Hormuz getting blocked and prices of crude oil shooting up, there’s a real worry that inflation is going to start rising fast enough to make the Federal Reserve think twice about cutting interest rates any time soon.

In fact, high energy prices could make the Fed more likely to keep rates high to keep a lid on inflation, all of which should in the short term at least limit expectations of a rate cut. And with equities wavering and the Treasury market being a bit of a mess, all that’s helped to make the dollar look a bit more attractive than it has in a while.

Whats On The Agenda This Week

Markets are all ears for what Fed boss Jerome Powell has to say, as well as for reports on ADP payrolls, the ISM surveys, retail sales and then on Friday the all important Nonfarm Payrolls number. If the numbers come out looking strong that could only reinforce the Fed’s decision to tighten policy further – but if they’re not so hot then maybe all those recent gains in the dollar start to unwind. And all the time the risk of a blow up in the middle east remains a major threat to the whole deal.

U.S. Dollar Index (DXY) Forecast: Triangle Break Near 100.35

The US Dollar index is really struggling against that stubborn descending trendline resistance at 100.30 on the 2 hour chart, forming a symmetrical triangle that’s getting tighter all the time. Prices keep on making higher lows from the 99.18 low, while repeatedly being drawn up against that pesky overhead supply around 100.35 – it’s like buyers are trying to break through, and you can sense the breakout pressure building.

The 50-period moving average has finally crossed above the 200-period one, which just adds to the short term bullish vibes. You can also see buyers are defending pullbacks towards 99.80 and 99.50 – that’s where the prior consolidation really kick-started demand.

Busting above 100.35 would probably send the price surged up to 100.53 and maybe even 100.75. But fail to clear that resistance and expect a retreat back down to 99.80 support and the rising trendline at about 99.20.

Trade idea: Buy a breakout above 100.35 and aim for 100.75, stop-loss below 99.80.

GBP/USD Forecast: Trendline Break Signals Bearish Shift

GBP/USD is currently hovering around 1.3240 on the 2 hour chart after just slipping under a trendline it had been riding high on since mid-month – a trendline that had been a reliable prop for the price up till then. However, since then the pair has been posting a series of lower highs, starting from the 1.3447 mark – and this is definitely starting to look like a bearish setup as the sellers keep reasserting themselves anytime the price tries to push above the 1.3366 resistance ceiling.

The 50-period moving average is now beginning to slope downwards, and it’s noteworthy that it’s still below the 200-period average, which is typically seen as a sign of a downtrend still in force. To top it off the price is having a pretty tough time staying above 1.3285 which was just recently acting like a healthy source of support but now looks more like a hurdle the price needs to clear.

A move below 1.3218 at this point could very well open the door to 1.3175, and if that holds then 1.3128 could be the next stop. On the other side of the equation if the price can break above 1.3285 then we’re likely to see a bit of a bounce higher as the shorts get closed out and the price heads towards 1.3366 again.

Trade idea: Sell GBP/USD whenever we see a price below 1.3230, with a target of 1.3175, and place a stop-loss above 1.3285.

EUR/USD Forecast: Trendline Support Under Pressure Near 1.1500

EUR/USD is hovering around 1.1490 on the 2-hour chart, and things are getting a little hairy for that rising trendline which has been propping up price action since the middle of the month. The pair’s been putting in a series of lower highs – the latest at 1.1669 – which is a pretty clear sign that buyers are losing steam, and sellers are starting to take control again – especially now we’re looking at prices below that 1.1570 line which has been such a thorn in their side for a while.

Meanwhile, the 50-period moving average has stalled and is still sitting pretty below that 200-period average – another sign that the bigger picture here is one of correction. And it’s not just the averages – price is having an awful lot of trouble getting back up to that 1.1522 pivot level – which is now playing the role of near-term resistance.

If the trendline support does finally break, then we’re probably looking at 1.1445 – and potentially even 1.1410. But on the flip side, if we do manage to get back above 1.1522, it might just spark a squeeze up towards 1.1570.

Trade idea: Sell below 1.1485, targeting 1.1445, but stop losses would be above 1.1525.