US Dollar Price Forecast: Gains Ahead of Trump-Xi Trade Talks – GBP/USD and EUR/USD

Market Overview

The US Dollar Index (DXY) traded near 99.00 during Thursday’s Asian session, recovering from recent losses as optimism rose ahead of next week’s meeting between President Donald Trump and President Xi Jinping in South Korea.

The talks, expected to focus on soybean exports, nuclear controls, and China’s purchases of Russian oil, lifted sentiment toward the Greenback after weeks of uncertainty.

Trade Talks Spark Hope for Market Stability

Trump’s remarks that he expects to reach “several agreements” with Beijing helped support the dollar, fueling hopes of improved trade cooperation. “If the meeting delivers progress, it could provide a temporary boost to the US currency,” said John Hardy, FX strategist at Saxo Bank.

However, optimism was tempered by Reuters reports suggesting the US may impose new export restrictions on Chinese-bound goods using American software—an escalation that could reignite trade frictions.

Fed Rate Cuts and Data Delays Keep Markets Cautious

Meanwhile, growing expectations of Federal Reserve rate cuts continue to limit the dollar’s upside. The CME FedWatch Tool indicates a 97% chance of a 25-basis-point cut at the October 29 meeting and another by December.

A Reuters poll of 117 economists showed 115 expect the Fed to lower rates to 3.75%-4.00%, reflecting softer economic momentum and persistent inflation risks.

The US government shutdown, now in its fourth week, adds further uncertainty by delaying key data releases such as Nonfarm Payrolls (NFP). Despite the lack of fresh data, the dollar remains supported by safe-haven flows.

Traders now await the Trump-Xi meeting outcome for direction on whether the DXY’s recovery can extend or lose steam amid policy headwinds.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index (DXY) is trading near 99.03, showing signs of stabilization after rebounding from its recent low at 98.38. On the 4-hour chart, the index is consolidating within a symmetrical triangle pattern, suggesting a potential breakout phase ahead.

The 50-day EMA at 98.76 acts as immediate support, while the 200-day EMA around 98.36 provides a secondary cushion. A sustained move above the 99.12 resistance could confirm a bullish breakout, paving the way toward 99.55 and possibly 99.96. Conversely, a drop below 98.70 may expose the DXY to a correction toward 98.38 or 98.02.

GBP/USD Technical Analysis

The GBP/USD pair is trading near $1.3351, showing mild weakness after failing to break above the $1.3376 resistance zone. The price remains capped by a descending trendline that has limited upside moves since late September.

On the 4-hour chart, 50-EMA ($1.3382) and 200-EMA ($1.3427) continue to act as dynamic resistance, reinforcing the bearish bias. A break below $1.3320 could trigger a move toward $1.3247, while a clear push above $1.3400 might attract short-term buyers.

EUR/USD Technical Forecast

The EUR/USD pair is trading near $1.1594, maintaining a bearish tone as it continues to face resistance at $1.1625. On the 4-hour chart, the price remains below both the 50-day EMA ($1.1631) and 200-day EMA ($1.1668), suggesting sellers retain short-term control.

The pair is currently oscillating within a descending triangle, with support forming around $1.1538. A break below this zone could expose $1.1473, while a push above $1.1650 may trigger a short-term recovery toward $1.1710.