US Dollar Price Forecast: DXY Sinks Toward $98 as Trump Hints at Iran Peace Deal – Are GBP/USD and EUR/USD Bulls Ready?

Market Overview

The Dollar Index (DXY) is currently hovering around 98.10 – 98.25, more or less unchanged today, and on the cusp of a third week of losses. The fundamental drivers are all about the optimism around US-Iran diplomatic progress – specifically President Trump’s comments that a quick resolution could be in the offing, a ceasefire extension, and the Strait of Hormuz reopening. That optimism is sending safe-haven demand into a retreat, which in turn reduces the need for energy and is weighing on the US Dollar.

The EUR/USD is sitting at 1.1780 – 1.1800. The euro is getting a boost from the same waves of de-escalation hopes that are softening demand for the USD, but the gains are still pretty cautious because expectations for ECB rate hikes are pretty low and the eurozone’s energy exposure is still a worry.

The GBP/USD is trading in the 1.3510 – 1.3550 range. Sterling is under pressure from Betters betting on less BoE hikes, but the UK’s growth dataUK’s growth data is giving it a bit of a gentle nudge. For now though, the pairs are being driven by EUR/USD – but the USD’s weakness thanks to hopes of a Middle East breakthrough that just won’t go away.

All three currencies are still super sensitive to any breakthroughs or setbacks in US-Iran talks as the oil blockade and energy uncertainty drags on.

US Dollar Index Technical Analysis: DXY Presses Hard On $98 Support After Breaking Down

The US Dollar Index (DXY) is hanging around 98.10 still going strong in its bearish mode after slipping below that critical Fibonacci support at 98.36-98.52. It’s still stuck below both the 50-day and 200-day moving averages, so you know where the momentum is headed. That descending trendline just keeps capping any recovery we see, and the latest candles aren’t showing any real follow-through on the upside.

The RSI on this one is hovering around 40-45, and that’s just a sign of low momentum – not yet a sell signal. Next stop is 97.84 support, and if it breaks below that, expect it to pick up losses heading toward 97.40 pretty quick. The only way to stop this slide would be to get above 98.50, that would at least stabilise sentiment.

GBP/USD Technical Analysis: Pound Tests Trendline Support At 1.3520

GBP/USD is trading near 1.3524, just consolidating and waiting for the big decision along that ascending trendline that’s been supporting the recent rally. Price is still holding above that 1.3510-1.3480 Fibonacci support zone, and that short term 50 day average is still playing along. However, that rejection from 1.3590 resistance is a warning sign the bull run may be fading.

The RSI is starting to slip down toward 45, and that’s just a sign the strength that sent us up to the recent highs is running out of steam. A break down through the trendline and 1.3480 could be trouble – could trigger a correction toward 1.3420.

On the other side of things, you need to see that 1.3550-1.3590 range claimed back to get the bull trend going again.

EUR/USD Technical Analysis: Euro Stays Stubbornly Uptrend Above 1.1760 Support

EUR/USD is trading at 1.1795 still looking strong in its uptrend thanks to that rising trendline from back in April. Price is still holding above the 1.1760-1.1715 zone that’s been acting as support, and that short term 50-day average is still pushing price higher. The 200-day average remains below price but that just reinforces the uptrend.

The RSI is near 50, and it’s pretty clear the market is just consolidating after that last big rally. The first real resistance is at 1.1826, and if we get a break above that, it’s on to 1.1880.

On the other side of things, a drop below 1.1760 would be bad news for bulls – it could just signal the start of a deeper correction.