US Dollar Price Forecast: DXY Steady Ahead of ECB – Do GBP/USD and EUR/USD Face a Drop?

Dollar Index Holds 100 as Hawkish Fed Anchors Sentiment

The US Dollar Index is currently hovering at 100.15 with a tight intraday trading band of roughly 99.99 to 100.29 – it’s staying right at the key 100 psychological mark. Yesterday we saw dollar price action driven by further support from the Fed’s stubbornly hawkish stance, after the Fed signaled again that rate cuts are off the table for now.

The inflation stat from last month’s producer prices actually confirmed expectations – they rose 0.7% month on month and a fairly hefty 3.4% year on year, all of which means policy easing is going to be pretty limited in the short term.

In the background of course is the ongoing geopolitical tension in the Middle East – specifically the threat to energy infrastructure, which has pushed up the dollar’s appeal as a safe haven choice. Over the past month DXY has gained about 2-3%, though it’s still down a bit 3 to 4% year over year. Resistance is just about to set in near 100.40 to 101, with 99.50 and 98.90 acting as the immediate support levels.

Euro and Pound Take Energy Prices Into Account

The EUR/USD is trading just about 1.1470 after a bit of a bounce off the 1.1400 area, while the Eurozone’s outlook is getting hammered by energy price spikes. As for the ECB, expect them to stand pat on rates today – markets will be looking extremely closely for any potential guidance – and the general expectation is that they’ll keep it steady.

The GBP/USD is sitting on 1.3280 as we get closer to the Bank of England’s decision day. Forecasters reckon there won’t be any rate cut coming up, compared to all the speculation we were hearing about a few weeks ago. Dollar sentiment remains very much in favor of the dollar as long as these inflation and geopolitical worries continue to dominate the market.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is currently trading around 100.18 on the 4-hour chart, hanging just above the 0.236 Fibonacci level at 100.05 after a bit of a rebound from 99.52. Price continues to play nice with an ascending trendline from the 98.49 low, and that 50-period moving average is still trending higher – which is pretty reassuring for folks who like to see a solid support in place.

Over the past few days, that small rejection from 100.54 helped cap the gains, but buyers renewed their efforts near 99.60–99.75 – a spot where the 0.382 retracement just happened to align with some prior support. The RSI is sitting pretty neutral around 55, which tells us the momentum is pretty well balanced.

A push above 100.54 could see prices target 100.81 and 101.07, but on the flip side, a drop below 99.52 risks pulling things back toward 99.27.

GBP/USD Technical Analysis: Slides Toward 1.3220 as Bearish Structure Persists

GBP/USD is trading at around 1.3258 on the 4-hour chart, and it’s basically being held back after that failure to hold above the 1.3375 resistance zone. Price is still getting capped beneath that descending trendline from the late-February highs, and is also getting in the way of both the 50- and 200-period moving averages, which is all telling us we’ve still got a bearish bias on our hands.

The pair did bounce off 1.3223 support there for a bit but then lost momentum as it neared 1.3350, where that dynamic resistance and some prior horizontal supply just happened to converge. RSI is slipping below the mid-50 level, which is telling us that bullish momentum is starting to fade away and the risk of a downside move is increasing.

Immediate support is lurking at 1.3220, followed by 1.3165. If we see a decisive break below 1.3220, we could see a deeper erosion of value toward 1.3115. Only a sustained move above 1.3375 would ease that near-term selling pressure and change the mood.

EUR/USD Technical Forecast: Pressures 1.1450 as Downtrend Remains Intact

EUR/USD is currently trading around 1.1457 on the 4-hour chart and is struggling just to stay under the 0.236 Fibonacci retracement at 1.1473 after that failed rebound toward 1.1510. The picture is looking pretty bearish overall, with price stuck inside that descending channel and also getting in the way of the 50- and 200-period moving averages.

Over the past few days, the attempts to move it higher have stalled at 1.1550–1.1610 – a spot where the 0.5 and 0.618 retracement levels just happen to converge with some dynamic resistance. Momentum has been pretty subdued, with RSI drifting below the midline, which is telling us the bullish pressure is starting to fade away.

Immediate support is lurking at 1.1413, followed by 1.1374. If we get a sustained break below 1.1410, we could see the deeper downside begin to take hold, heading toward 1.1338. Only a move above 1.1510 is going to let us close out that near-term selling pressure and start to get a feel for 1.1600.