US Dollar Price Forecast: Gains as Fed Pause and Trump Tariffs Lift DXY – GBP/USD and EUR/USD

Market Overview

The U.S. Dollar Index (DXY) edged higher near 98.50 during Thursday’s Asian session, recovering from earlier losses. The move reflects growing expectations that the Federal Reserve will hold interest rates steady at 4.25%–4.50% in its July meeting.

This shift in sentiment follows mixed U.S. inflation data and geopolitical developments influencing market positioning.

Inflation Data Reinforces Fed’s Cautious Tone

June’s CPI rose 2.7% annually, while Core CPI landed at 2.9%, both above the Fed’s long-term 2% target. Meanwhile, PPI was flat month-over-month, with Core PPI increasing 2.6% year-over-year.

The data supports recent Fed remarks: The Dallas Fed’s Lorie Logan emphasized a wait-and-see approach, while the NY Fed’s John Williams noted that current policy remains appropriate.

The Fed’s latest Beige Book indicates stable business conditions with modest cost pressures. Most firms remain cautiously optimistic but wary of future price increases, reinforcing the case for steady policy.

New Tariff Plans Fuel Market Uncertainty

Adding to the mix, President Trump proposed a 10% tariff on over 150 countries, with rates possibly rising to 15–20%. While India trade talks appear near completion, details remain limited. These developments may dampen global growth prospects but could support short-term demand for the USD.

Markets now await U.S. retail sales, jobless claims, and manufacturing data for further direction.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index is consolidating below the descending trendline resistance near 98.75 after a sharp rebound from the 98.15 support level. The price remains above the 50-EMA (98.24) and 200-EMA (97.88), suggesting that bullish momentum is intact in the short term.

A decisive breakout above 98.75–98.80 could pave the way for 99.02 and 99.26. On the downside, a drop below 98.44 may trigger a pullback toward 98.15 and 97.82. The structure remains cautiously bullish as long as the price holds above the EMAs, but trendline resistance continues to cap further upside.

GBP/USD Technical Analysis

GBP/USD remains under bearish pressure, trading within a well-defined descending channel on the 2-hour chart. The pair is currently hovering around 1.3407 after failing to breach the 1.3417 resistance zone, which aligns closely with the channel top. Both the 50-EMA (1.3441) and 200-EMA (1.3536) remain above price, reinforcing the downside bias.

If sellers regain momentum, a drop below 1.3369 could pave the way toward 1.3341 and potentially 1.3315 or 1.3280. On the upside, bulls need a decisive break and close above 1.3417 and the 50-EMA to challenge 1.3456 and shift momentum.

EUR/USD Technical Forecast

EUR/USD remains locked in a descending channel, currently trading near 1.1600 after rejecting resistance at 1.1641. The pair stays below both the 50-EMA (1.1644) and 200-EMA (1.1663), reinforcing bearish momentum.

A break below 1.1574 could expose deeper support at 1.1544 and 1.1522. Bulls need to clear 1.1612 and reclaim the 1.1641–1.1667 zone to shift bias upward. As long as the price stays confined within the channel and below the EMAs, downside risk remains in focus.