US Dollar Price Forecast: Gains Amid JOLTS Job Data Release – GBP/USD and EUR/USD Outlook

Market Overview

During the Asian trading session on Tuesday, the US Dollar Index (DXY) rebounded from a six-week low of 98.58 to near 98.90. This recovery precedes the release of key US labor data, including the JOLTS Job Openings report later today.

Weak Manufacturing Data Weighs on Dollar Outlook

Despite the rebound, the dollar faced headwinds following weaker-than-expected ISM Manufacturing PMI data. The PMI slipped to 48.5 in May from 48.7 in April, below the forecast of 49.5.

This marks the third consecutive contraction, highlighting ongoing weakness in US factory activity and raising broader economic concerns.

Tariff Hike Fuels Global Trade Tensions

Adding to market uncertainty, President Trump announced plans to double tariffs on steel and aluminum from 25% to 50%, effective Wednesday. The EU warned that these tariffs could derail bilateral trade talks, suggesting that countermeasures might follow, which would increase the risk of global trade disruptions.

Tensions between the US and China remain unresolved, as mutual accusations over tariff commitments persist, adding pressure on financial markets. (edited)

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is consolidating near 98.88 after a modest rebound from recent lows. Price action is constrained below a descending trendline, with immediate resistance at 98.93 and dynamic resistance from the 50-period exponential moving average (EMA) around 99.02. The 200-period EMA near 99.45 adds to the overhead pressure.

A confirmed breakout above 98.93 could target 99.30 or higher. Conversely, failure to clear resistance may lead to a retest of support near 98.57 or even 98.30.

Technical indicators suggest a tightening of price action within a descending structure, hinting at a potentially decisive move. Traders should monitor price behavior closely for a breakout above trendline resistance or a reversal below.

GBP/USD Technical Analysis

GBP/USD is consolidating near $1.3523, hovering just below the 23.6% Fibonacci retracement level at $1.3531. The 50-period EMA supports the price at $1.3514, and the 200-period EMA at $1.3478, providing dynamic support levels.

A decisive breakout above $1.3531 could push the pair towards the $1.3557–$1.3575 resistance zone, while a failure to hold current levels may trigger a pullback toward $1.3501 (50% retracement) or $1.3488 (61.8% retracement).

EUR/USD Technical Forecast

EUR/USD is consolidating near $1.1419, supported by a rising trendline and key EMAs (50-period EMA at $1.1399 and 200-period EMA at $1.1346). Price action remains constrained below the $1.1454 resistance level, but the pattern of higher lows suggests a potential bullish continuation.

A breakout above $1.1454 could open the door to the $1.1485–$1.1513 zone, while a failure to hold trendline support might prompt a pullback to $1.1400 or even $1.1389. The overall setup suggests tightening price action within a bullish channel, awaiting a decisive move.