US Dollar Price Forecast: Slips as Trump Tariff Wave Rattles Markets – GBP/USD and EUR/USD

Market Overview

In early Thursday trading, the US Dollar Index (DXY) slipped to 97.30, retreating from a two-week high. The move followed former President Donald Trump’s announcement of a sweeping set of new import tariffs. Starting in August, a 50% tariff will be imposed on Brazil, along with duties of 30% on Algeria, Libya, Iraq, and Sri Lanka, 25% on Brunei and Moldova, and 20% on the Philippines.

The upcoming 50% tariff on US copper imports, citing national security concerns, has further intensified concerns about rising input costs and global trade disruption.

Federal Reserve Opens Door to Rate Cuts

Meanwhile, minutes from the Fed’s June 17–18 meeting showed several officials favoring a rate cut as early as this month. While tariff-driven inflation remains a concern, the majority still expect these effects to be modest and short-lived. However, the Fed’s tone signals growing caution.

Upcoming Data and Fed Commentary in Focus

Markets now await US jobless claims data and speeches from Fed officials Musalem, Waller, and Daly. Signals of policy easing or concern about economic fallout from tariffs could weigh further on the dollar.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is consolidating around 97.43 after defending support at 97.17. Price action remains inside an ascending channel, but momentum is weakening, with several failed attempts to break above 97.60. The 50-period EMA is acting as dynamic support, while the 200 EMA overhead at 97.62 limits further upside.

A decisive break above 97.60 would confirm trend continuation toward 97.84 and 98.19. However, sustained weakness below 97.17 could invalidate the bullish channel and shift focus to 96.88 and 96.61. The dollar remains highly sensitive to shifts in yields and trade-related news.

GBP/USD Technical Analysis

GBP/USD is hovering near 1.3607, testing a descending trendline and horizontal resistance around 1.3611. Price remains compressed between the 50-EMA and 200-EMA, indicating indecision.

A sustained push above the trendline and the 1.3619 level could encourage buyers to target 1.3645 and 1.3679. However, rejection at this zone may reinforce the broader bearish structure, exposing downside toward 1.3563 and 1.3523.

EUR/USD Technical Forecast

EUR/USD is trading at 1.1731, having been caught below the descending trendline resistance after attempting a recovery from 1.1712. Despite reclaiming the 50-period EMA, the pair lacks the conviction to break above 1.1743, a level aligned with both horizontal and trendline resistance.

Price action indicates consolidation within a descending triangle, with bears defending every attempt to push higher. A clear break above 1.1743 could trigger upside toward 1.1765 and 1.1791. However, rejection at current levels keeps bearish pressure intact, with a potential retest of 1.1712 and 1.1681.

Traders are watching for confirmation from upcoming remarks by the Fed and ECB. For now, directional bias hinges on whether bulls can reclaim the descending structure or if sellers regain momentum below 1.1710.