US Dollar Price Forecast: Edges Higher Ahead of CPI Data Release – GBP/USD and EUR/USD

Market Overview

During Wednesday’s Asian session, the U.S. Dollar Index (DXY) extended its gains for a second day, trading near 99.39. The advance was supported by improving U.S.-China trade sentiment, steady Treasury yields, and anticipation ahead of May’s Consumer Price Index (CPI) release.

Dollar Boosted by Trade Progress and Diplomatic Tone

The dollar’s recent strength reflects optimism around renewed trade dialogue. U.S. Commerce Secretary Howard Lutnick confirmed that both sides are working toward implementing the Geneva Consensus.

Meanwhile, China’s Vice Commerce Minister Li Chenggang noted productive talks and plans to report the proposed framework to Beijing’s leadership.

While final approvals are pending, the cooperative tone has reduced market anxiety and reinforced USD demand.

Yields Hold Steady as Markets Await CPI Impact

Stable Treasury yields also lent support. The 2-year and 10-year yields stood at 4.01% and 4.46%, respectively, suggesting cautious positioning. Markets are now focused on May’s CPI, expected to rise 2.5% year-over-year.

The data could influence the Federal Reserve’s rate trajectory and offer insights into the economic impact of evolving tariff policies, making it a critical point for traders this week.

US Dollar Index (DXY) – Technical Analysis

The DXY is inching higher, pressing up against the $99.39 resistance level while holding above an ascending trendline. Price is compressing into a tightening wedge, with buyers defending higher lows while sellers lean on the 200 EMA at $99.35.

The 50 EMA ($99.05) is still below the 200, suggesting the broader trend remains cautious, but short-term momentum is tilting bullish. If DXY clears $99.39 with conviction, $99.66 and $99.96 are next.

A break below $98.81, however, could snap the trendline and send us toward $98.58 support. So far, no reversal candlesticks, but the slow grind higher is worth watching, especially with key macro catalysts looming.

GBP/USD Technical Analysis

The British pound ($GBPUSD) has slipped below the 200 EMA ($1.34826) after failing to hold above a descending trendline and the 50 EMA ($1.35212), signaling that bears are gaining ground. Price is now testing support around $1.34712.

There’s no bullish reversal candle yet—no hammer, no engulfing—just a slow grind lower. If $1.34600 gives way, the next target is $1.34454, followed by $1.34159. On the flip side, reclaiming $1.34830 could trigger a minor rebound toward the broken trendline and $1.35301.

The short-term tone is bearish unless bulls step in fast. Right now, momentum favors sellers, especially with lower highs forming and EMAs turning south.

EUR/USD Technical Forecast

EUR/USD is hovering near the rising trendline support, trading just above $1.14050. The pair has been rangebound for days, with price stuck between $1.14574 and $1.14050, but the uptrend remains technically intact.

The 50 EMA ($1.14136) is flattening, while the 200 EMA at $1.13671 continues to slope upward, showing medium-term strength. Bulls are defending higher lows, but there’s been no convincing breakout or reversal pattern—just a series of small-bodied candles hinting at indecision.

A clean break above $1.14574 opens the door to $1.14953. If price slips below the rising trendline and loses $1.1405 support, eyes shift to $1.13723. It’s a wait-and-see game, with price tightening into a decision zone.