US Dollar Price Forecast: Gains Amid Trump Bill Debate and Fed Minutes, GBP/USD and EUR/USD

Market Overview

During the Asian session, the U.S. Dollar Index (DXY) advanced over 0.50% to 100.40, reflecting growing anticipation ahead of Thursday’s key economic data releases, including Q1 GDP estimates, PCE inflation figures, and initial jobless claims.

These indicators will offer insights into the U.S. economy and guide future Federal Reserve decisions.

Fed’s Cautious Tone Lifts Dollar

The DXY’s momentum was supported by the Federal Open Market Committee (FOMC) minutes, which signaled a patient approach amid economic uncertainty. Fed officials agreed to keep rates steady for an extended period, underscoring the risks associated with recent policy shifts.

This dovish tone contrasts with earlier expectations of aggressive tightening, which boosts the dollar’s appeal.

Fiscal Concerns Add Pressure

Meanwhile, former President Trump’s proposed “One Big Beautiful Bill” faces criticism. Expected to pass the Senate, the bill offers tax breaks on tips and loans for U.S.-made cars but could raise the deficit by $3.8 billion.

Senator Ron Johnson warned of mounting fiscal strain, noting the $2.2 trillion annual deficit. Higher deficits could push bond yields up, reinforcing Dollar strength. The Dollar faced some resistance as President Trump extended the EU tariff deadline from June 1 to July 9, easing trade tensions and reducing safe-haven demand.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) fell to around $100.00 after rejecting resistance at $100.55, where the 200-EMA acted as a barrier. Price action is testing support near the 50-EMA at $99.67, with a break below likely to open the path toward $99.34 and deeper to $98.73.

The recent drop challenges the bullish breakout above the descending trendline. A clear move above $100.55 is needed to regain upward momentum and target higher levels at $101.16. However, the market is showing mixed signals as momentum indicators flatten and the price consolidates.

GBP/USD Technical Analysis

GBP/USD is consolidating near $1.3460 after rebounding from the $1.3414 area, which aligns with the 200-EMA support. The pair is encountering resistance around the $1.3477 level and the broken rising channel support.

A clear break above this zone could extend gains towards $1.3522, but momentum remains cautious. The 50-EMA at $1.3483 may act as a near-term ceiling. Failure to sustain above $1.3477 may lead to a pullback, with immediate support at $1.3414 and further downside potential toward $1.3346.

EUR/USD Technical Forecast

EUR/USD is hovering near $1.1270, testing the 50-EMA at $1.1314 after failing to hold above $1.1289. Price action broke below the ascending trendline, hinting at further downside risk. A sustained break below $1.1260 would open the door to $1.1218, while $1.1176 acts as deeper support.

Momentum indicators show weakening bullish signals, and the market remains vulnerable to a sharper pullback, especially if the dollar continues to strengthen. A break back above $1.1314 is needed to stabilize the short-term outlook.