US Dollar Price Forecast: DXY Tests $99.00 Pivot – Are GBP/USD and EUR/USD Bulls Ready?

Dollar Stabilizes as Ceasefire Fallout Begins to Fade

The US Dollar is calm and fairly steady at levels around recent lows, having taken a sharp hit after various geopolitical developments really got investors spooked. The DXY Index is hovering around that 99 mark now, settling after dropping nearly 1% in the previous session – a pretty big drop, but not necessarily a game-changer in the grand scheme of things.

EUR and GBP Take a Breather After Really Running Up

The euro and British pound have pretty much levelled off after a nice little bounce on hopes that things are going to calm down geopolitically. Both still sitting pretty after they both gave the multi-week highs a little test, while GBP/USD actually dropped back a bit after rising by over 1% in a single session. Now both of these pairs are just taking a little breather to see what the next move will be, and the momentum is starting to fade.

Geopolitics and Interest Rate Outlook on the Radar

The ceasefire agreement that got those tankers moving through the Strait of Hormuz again has taken some of the pressure off the dollar as a safe haven. But it’s still up in the air how well it’s going to stick – and that uncertainty is still making investors a bit skittish.

With all that going on, now market attention is turning to the US inflation data and what the Fed will be saying – and that’s going to be a key factor in where major currency pairs are headed from here.

DXY Slips Below Trendline as Bearish Momentum Builds

The US Dollar Index is in a pretty precarious spot at around $99.05, having broken below that ascending trendline support which used to be at $99.50 – a pretty clear sign that the short-term picture has changed. Take a look at the recent candles, they’re looking pretty bearish, with some long-bodied red closes that just won’t quit, and it’s no surprise then that we’ve seen a rejection at $100.15 resistance.

Now the price is just hovering above that 200-SMA at $99.00 – it’s a key pivot level that’s worth keeping an eye on. If DXY can break below $98.50, then we could see some real downward momentum towards $98.15.

The RSI has dropped down towards 40 now, but it’s not quite been oversold yet. Immediate resistance stands at $99.68 and $100.15.

Trade idea: Sell once DXY drops below $98.50, targeting $98.15, stop loss just above $99.70.

GBP/USD Eyes Continuation as Fib Structure Supports Higher Lows

GBP/USD is trading around $1.3395 after a sharp little run up that broke above the $1.3360 resistance and those key fib levels. If you take a closer look at the chart you’ll see a nice strong engulfing breakout followed by some consolidation within that 0.382-0.5 retracement zone – which is all part of the bigger picture of healthy continuation structure.

That ascending trendline from April is still holding strong, providing some dynamic support at $1.3330.

The RSI is above 60, so the momentum is still strong, but we can see it’s maybe cooled a bit just recently. Immediate resistance is at $1.3427 and $1.3486, while support is still holding firm at $1.3360 and $1.3330.

Trade idea: Buy dips near $1.3360, targeting $1.3450, stop loss below $1.3320.

EUR/USD Breakout Holds Above $1.1650 as Bullish Structure Strengthens

EUR/USD is hanging out around $1.1665, having made a pretty strong breakout above that trendline and resistance zone at $1.1625. You can see the strong evidence of buying pressure in the form of all those bullish candles with higher highs.

Price is still holding above both the 50-SMA and those key fib retracement levels – which is all good news for the bulls.

Momentum is still looking pretty constructive with the RSI near 60-65 – but don’t worry, it’s not getting too over the top. Immediate resistance is at $1.1718 while the support levels are at $1.1650 and $1.1595.

Trade idea: Buy above $1.1650, targeting $1.1718, stop loss below $1.1620.