US Dollar Price Forecast: Greenback Recovers as Traders Bet on Fed Easing — GBP/USD and EUR/USD

Market Overview

During early European trading, the US Dollar (USD) stabilized after three sessions of losses, though its broader momentum remains at risk. Markets are increasingly positioning for a December rate cut, a shift that continues to influence currency sentiment.

According to the CME FedWatch Tool, traders now assign an 87% probability to a 25-basis-point reduction, up sharply from 39% just a week earlier. Expectations for additional easing extend into 2026, reflecting a firm belief that monetary conditions will continue to loosen.

Speculation intensified after reports that White House National Economic Council Director Kevin Hassett is the leading contender for the next Federal Reserve chair.

Market participants generally view Hassett as supportive of lower interest rates, a stance that aligns with the policy direction favored by President Donald Trump. This perception has reinforced forecasts of a more accommodative Fed stance.

US Dollar Finds Support Despite Easing Bets

Despite rising expectations for rate cuts, the US Dollar has held steady. Persistent global uncertainty continues to support the USD’s appeal as a reliable store of value, limiting any meaningful downside pressure in the near term.

What Traders Are Watching Next

Market focus now shifts to upcoming US economic data releases and further commentary from Federal Reserve officials. These inputs will help determine whether the Dollar maintains its current footing or begins to reflect the growing likelihood of policy easing.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index is holding near $99.66, stabilizing after a pullback toward the ascending trendline that has guided the broader uptrend since early October. Price is still trading above the 200-EMA at $99.41, while the 50-EMA at $99.78 is acting as the immediate barrier. The RSI has recovered from oversold territory and is turning higher, indicating improving momentum.

A close above $99.80 would signal a stronger rebound, opening the way toward $100.38, where previous rallies stalled. If buyers fail to hold the trendline near $99.40, the index may slip toward $99.00 for the next support test.

GBP/USD Technical Analysis

GBP/USD is trading near $1.3210 after pulling back from $1.3264, where price met the descending trendline that has capped rallies since mid-September. The pair remains above the 50-EMA at $1.3147, while the 200-EMA at $1.3191 is acting as immediate resistance. This EMA cluster continues to shape short-term direction.

RSI has eased from overbought territory toward 63, suggesting cooling momentum after last week’s sharp advance. Immediate support sits at $1.3168, and a break below opens the path toward $1.3103.

For buyers to regain control, GBP/USD must close above $1.3264, which would expose $1.3325. Until then, the pair trades within a capped structure, waiting for a decisive breakout.

EUR/USD Technical Forecast

EUR/USD is trading near $1.1578 after pulling back from the descending trendline that has capped upside moves since early September. Price is hovering just below the 50-EMA at $1.1567 and remains under the 200-EMA at $1.1589, keeping the short-term outlook cautious. The pair recently failed to hold above $1.1595, signaling hesitation from buyers.

The RSI has slipped from the mid-60s toward 52, indicating cooling momentum without turning bearish. Immediate support sits at $1.1560, followed by $1.1545. A break below these levels could expose $1.1512.

To revive upward momentum, EUR/USD needs a firm close above $1.1595, which would bring $1.1654 back into view. For now, the pair remains stuck under trendline pressure.