US Dollar Price Forecast: DXY Slips Below $97 Ahead of Fed – Can GBP/USD and EUR/USD Rally Further?

Market Overview

The broad-based US dollar has managed to recover some ground after recent declines but continues to face downward pressure. As of now, the US Dollar Index (DXY), which tracks the dollar against six major currencies, is currently trading around 96.12.

Despite this modest recovery, the greenback remains sluggish, having dropped to its lowest level since February 2022, as the “Sell America” sentiment continues to weigh on investor confidence.

Fed Rate Pause Expectations Offer Some Support

On the flip side, the Federal Reserve is expected to keep rates unchanged at 3.50%–3.75% at the end of its two-day meeting. Investors are keeping their eyes on the post-meeting press conference for guidance on the Fed’s policy outlook. Although the expectation of a rate pause is giving some support to the dollar.

Trade Tensions Weigh on the Dollar

Apart from this, global market uncertainty is keeping the dollar under pressure. President Trump said the dollar’s value is “great,” which triggered some selling. He also threatened 100% tariffs on Canadian goods if Canada strikes a deal with China, adding more worry.

Canada’s Prime Minister Mark Carney responded that the country has no plans for a trade deal with China, which eased tensions slightly but didn’t fully calm the market.

US Job Growth Slows Slightly, Keeping Dollar Under Pressure

In addition to this, US economic data is showing moderate growth, which is not very strong but not weak either. The latest ADP Employment Change 4-week average came in at 7,750 jobs, slightly lower than the previous 8,000.

This small slowdown in job growth is not very alarming, but it put some pressure on the US dollar. Hence, investors are waiting for clearer signals from the Federal Reserve about the next move in interest rates.

US Dollar Index Forecast: DXY Breaks Triangle Support – Is $95.50 the Next Test?

The US Dollar Index (DXY) has dropped sharply to about $96.10 after failing to move above the top of a multi-month symmetrical triangle. The most recent daily candle is strongly bearish, confirming a break below the rising trendline support near $97.50. The price is now below the 50-day moving average, and the 200-day moving average near $99.50 is still limiting any rebounds.

Momentum supports this move, as the RSI has fallen below 30, showing strong downward pressure instead of just being oversold. Looking at Fibonacci levels, the index is testing the 61.8% retracement near $95.60, with the next support at $94.80. Resistance is now between $97.50 and $98.40.

Trade idea: Consider selling on rallies below $97.50, aiming for a target of $95.00. This view is invalid if the price moves above $98.40.

GBP/USD Price Forecast: Sterling Pauses Near $1.38 – Breakout Retest or Setup for $1.40?

GBP/USD is holding steady around $1.3800 after a strong upward move and a clear breakout above the $1.3630 to $1.3710 Fibonacci zone. The latest daily candle is small, which points to some profit-taking rather than a reversal. The price is still above a rising trendline and remains well above the 50-day EMA.

The 200-day EMA, now near $1.3350, continues to support the broader trend. The pair is trading within a rising channel, and the RSI is close to 60, easing back from overbought levels without showing divergence. Key resistance is at $1.3940 and $1.4030, while support is at $1.3710.

Trade idea: Consider buying on dips above $1.3700, with targets at $1.3940 and $1.4030. This idea is invalid if the price falls below $1.3630.

EUR/USD Price Forecast: Holds $1.20 Breakout – Can Bulls Extend Toward $1.22?

EUR/USD is trading around $1.1995 after a strong rally, staying above a rising trendline from the mid-January lows. Recent candles are smaller, which suggests the market is pausing rather than reversing after breaking above $1.1900. The price is still well above the 50-EMA, and the 200-EMA is back near $1.1750, which supports the current trend.

Looking at the chart, the pair is forming a bullish continuation flag above previous resistance. The RSI is around 65, coming down from overbought levels but not showing any bearish signals. Key support is between $1.1975 and $1.1900, while resistance is at $1.2080 and $1.2210.

Trade idea: Consider buying on pullbacks above $1.1950, with a target range of $1.2080 to $1.2200. This idea is invalid if the price falls below $1.1900.