US Dollar Price Forecast: Five Central Banks Loom, DXY Holds 101.60 as EUR/USD, GBP/USD Coil

Dollar Drifts as Five Central Banks Prepare to Decide

Currencies started the week in tight ranges ahead of a rare cluster of central bank decisions. Below the surface, the drivers are pulling in different directions: France won a reprieve from a credit downgrade, while UK shoppers are losing momentum just as the Bank of England prepares to raise rates.

Dollar Index: All Eyes on Wednesday

A pullback in oil prices and Treasury yields weighed on the dollar on Monday, Reuters reported, though the dollar index, which tracks the dollar against six major currencies, was little changed near 101.65. Traders are waiting for decisions from the Fed, ECB, Bank of Japan, Bank of Canada and Reserve Bank of New Zealand. The first three are expected to hold rates, while Canada and New Zealand are expected to raise them.

In a Reuters poll, 94 of 100 economists expect the Fed to hold on Wednesday. Fed Governor Christopher Waller has said further hikes are likely needed to bring inflation down, but they do not have to come at back-to-back meetings. That is why traders will focus on how many policymakers vote for a hike and on any hint about December, rather than on the decision itself.

Euro: France Avoids a Downgrade

Moody’s kept France’s credit rating at Aa3 with a negative outlook on Friday, meaning a downgrade is still possible later. That spared the government a cut during a week of unrest and rising bond yields, and the euro edged up 0.15% to 1.1218 on the relief. Moody’s said the rating assumes France adopts a 2027 budget that reduces the deficit and that borrowing costs and social tensions ease somewhat. The next test comes from S&P, which is scheduled to review France on November 27.

The ECB meets on Thursday and is expected to hold. Traders had already cut their bets on further ECB hikes after euro zone bond spreads blew out earlier this month, Bloomberg reported. Higher rates would make France’s debt even more expensive to finance.

Pound: Spending Slips Before the Budget

UK retail sales volumes, which strip out price changes, fell 0.4% in September, worse than the 0.1% drop economists expected. Shoppers bought less food, and unusually warm weather held back clothing sales. GfK consumer confidence fell 11 points to minus 24, its steepest one-month fall since the 2020 pandemic.

The data land just before Chancellor John Healey’s Autumn Budget on October 28. That adds a growth risk to a pound that has leaned on expectations of a November rate hike, since weaker spending could give the Bank of England a reason to move more carefully.

US Dollar Index Technical Analysis: DXY Holds 101.60 Support as 102.00 Caps the Rebound

The US Dollar Index is trading near 101.67 on the 4-hour chart. After topping at 102.92, DXY has drifted lower and is now resting just above the 101.60 support zone. The faster moving average, a line showing the recent average price, is capping rebounds near 101.82.

Support, where buyers tend to step in, is 101.60, then 100.87. Resistance, where sellers tend to step in, is 102.00, then 102.43.

RSI, which measures the strength of recent buying and selling, is around 46, which is neutral. My bias stays neutral while DXY trades between 101.60 and 102.00. A close below 101.60 would favor sellers, while a move above 102.00 would favor buyers.

EUR/USD Technical Analysis: Euro Holds 1.1189 Inside Triangle as 1.1257 Comes Into Focus

EUR/USD is trading near 1.1219 on the 4-hour chart, still inside a triangle, a pattern where price swings get smaller between a falling top line and a rising bottom line. Buyers defended 1.1189 again last week.

The triangle’s top line near 1.1252, with 1.1257 just above it, is the first resistance, then 1.1297. The bottom line near 1.1197, with 1.1189 just below it, is the first support, then 1.1150.

RSI is near 51, also neutral, so I would stay neutral until price breaks out of the triangle. A close above 1.1257 would favor buyers, while a drop below 1.1189 would favor sellers.

GBP/USD Technical Analysis: Pound Stuck Between 1.3356 and 1.3407 Ahead of Breakout

GBP/USD is trading near 1.3376 on the 4-hour chart. The pound has been stuck in a tight range for a week. Sellers have capped it at 1.3407 three times, and buyers keep defending 1.3356. Both moving averages are rising below price, which keeps the broader trend pointing up.

The first resistance is 1.3407, then 1.3439. On the downside, 1.3356 is the first support, followed by 1.3325.

RSI is near 53 and easing. In my view, the pound keeps a slight bullish lean above 1.3356. A close above 1.3407 would open the way higher, while a drop below 1.3325 would favor sellers.