US Dollar Price Forecast: DXY Steadies Ahead of FOMC Minutes GBP/USD and EUR/USD

Market Overview

During early European trading, the US Dollar Index (DXY) held near 99.58 as traders avoided major positioning ahead of Wednesday’s FOMC Minutes. The focus will then shift to Thursday’s delayed US Nonfarm Payrolls (NFP) report, which still carries significant weight for dollar sentiment despite covering past labor-market conditions.

Fed Officials Signal Caution

Recent comments from Federal Reserve policymakers have helped keep the dollar supported. Fed Vice Chair Philip Jefferson said the central bank should move “slowly” with any further rate reductions, while Atlanta Fed President Bostic and Kansas City Fed President Schmid highlighted persistent inflation risks and expressed little urgency for easing.

These remarks have limited downside pressure on the dollar at a time when broader market uncertainty is elevated.

Data Delays Add to Policy Uncertainty

The ongoing US government shutdown has postponed the release of important economic indicators, complicating the Fed’s assessment of current conditions. Markets expect the delayed September NFP report to show around 50,000 new jobs, up from August’s 22,000, with unemployment projected to hold at 4.3%.

A weaker print could reinforce concerns about slowing growth, while stronger data would support the dollar by reducing expectations for imminent rate cuts.

Market Outlook

Investor sentiment remains cautious as inflation stays above target and data visibility remains limited. Expectations for a December rate cut have eased to 46%, according to the CME FedWatch tool.

For now, the DXY may continue to trade with a slight upward bias as markets assess the upcoming FOMC Minutes and NFP report for clearer direction on the economic outlook and future Fed policy.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index is holding near $99.55 but remains confined within a descending channel that has guided price lower since early November. The index is struggling to maintain momentum above the $99.66 resistance band, where the 20-EMA continues to cap intraday advances.

The RSI is hovering near 55, signaling modest upside interest but no clear breakout signal.

A rejection from the channel’s upper boundary keeps the bias tilted slightly bearish. A move below $99.24 would expose the mid-channel support near $98.99. If buyers manage a sustained close above $99.66, the dollar could challenge $100.30.

GBP/USD Technical Analysis

GBP/USD is trading near $1.3150 and continues to respect the descending trendline that has capped every rally this month. The pair remains below both the 50-EMA and 200-EMA on the 4-hour chart, keeping momentum tilted to the downside.

Recent candles show tight consolidation, reflecting hesitation ahead of major drivers. RSI sits near mid-range with a slight downward bias, showing weak demand but no clear exhaustion. A break below $1.3108 would expose $1.3009, followed by $1.2970.

If buyers manage to push the pair above the descending trendline and hold above $1.3215, a recovery could begin, but current structure still favors sellers. For now, GBP/USD remains in a controlled downtrend with limited upside signals.

EUR/USD Technical Forecast

EUR/USD is holding above the $1.1573 support zone, where the rising channel’s lower boundary continues to attract buyers. The pair is attempting to stabilize after several sessions of lower highs, while the 20-EMA remains a near-term barrier to momentum. The RSI is hovering around mid-range, showing neutral pressure but early signs of accumulation near trend support.

If EUR/USD keeps the channel intact, a recovery toward $1.1655 becomes likely, followed by a potential extension toward $1.1695. A clean move above the 200-EMA would strengthen the bullish case.

Failure to hold $1.1573 would break the channel structure and expose $1.1542 as the next downside level. For now, the pair remains constructive as long as the ascending trendline holds.