US Dollar Price Forecast: Rises to 2-Month High on NFP Anticipation – GBP/USD and EUR/USD

Market Overview

The US Dollar extended its winning streak early Thursday, marking a sixth consecutive day of gains and reaching a fresh two-month high. The Dollar Index (DXY) broke decisively above the key 100.00 level, supported by renewed Fed hawkishness, persistent inflation, and anticipation ahead of Friday’s Nonfarm Payrolls (NFP) report.

Fed’s Policy Stance and Inflation Data Lift USD

The Federal Reserve’s latest policy statement reinforced its intent to keep rates elevated for longer, dampening expectations for early rate cuts. Policymakers emphasized the need for more evidence that inflation is cooling sustainably.

This firm tone, coupled with core inflation readings that remain uncomfortably high, has strengthened the case for a prolonged tightening bias. As a result, the greenback has found renewed demand.

Focus Turns to NFP, Unemployment Rate, PMI Data

All eyes now turn to Friday’s economic calendar. The July NFP report is expected to shape near-term Fed expectations. A strong jobs figure could confirm the Fed’s current trajectory and extend the USD rally.

Other key data points include the Unemployment Rate, ISM Manufacturing PMI, Construction Spending, and final S&P and Michigan sentiment figures.

Together, these will offer a broader view of economic momentum and influence the central bank’s policy direction going forward.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is holding just below the psychological 100 level after breaking decisively above a multi-week descending trendline and horizontal resistance at 99.35. Price action is now consolidating near 99.97 after peaking around 100.10, suggesting bulls may pause ahead of the U.S. Nonfarm Payrolls release.

Both the 50-EMA (98.76) and 100-EMA (98.38) have turned upward, reinforcing bullish momentum. If DXY sustains above 99.97, the next resistance lies at 100.55 and 101.28. However, a break below 99.35 could trigger a pullback toward 98.70.

GBP/USD Technical Analysis

The British pound remains under heavy selling pressure, with GBP/USD trading near 1.3203 after consistently failing to break above the 50-EMA (1.3298). The pair is confined within a well-defined descending channel on the 2H chart, reinforcing the short-term bearish bias. Price action has respected lower highs and lower lows, indicating that sellers remain firmly in control.

Immediate support lies at 1.3189, followed by 1.3136 and 1.3073. A break below this zone could accelerate losses toward the 1.30 psychological level.

On the flip side, bulls would need to reclaim the upper boundary of the channel and push above 1.3278 to open a potential move toward 1.3386. Until then, rallies are likely to be capped by the EMAs and sold into.

EUR/USD Technical Forecast

The EUR/USD pair continues to weaken, currently hovering near 1.1428 after breaking below the ascending channel support and the key horizontal level at 1.1503. The recent bearish momentum accelerated following a clean rejection from the 1.1829 zone and a death cross on the 4H chart, where the 50-EMA (1.1571) fell below the 100-EMA (1.1615).

The next support lies at 1.1398, and a clear break below it could expose 1.1312 and 1.1222 as further downside targets. Short-term sentiment remains bearish while the pair stays below the broken trendline and the moving averages.

On the upside, bulls must reclaim 1.1503 to signal a potential retracement toward 1.1600 and 1.1707. Until then, rallies may continue to be sold.