US Dollar Price Forecast: Slips to 9-Week Low Ahead Fed Rate Cut – GBP/USD and EUR/USD

Market Overview

During the Asian trading session, the US Dollar Index (DXY), which measures the Greenback against six major currencies, slipped 0.1% to 97.20, its lowest in three weeks.

The decline comes as markets position for the Federal Reserve’s policy announcement on Wednesday, where an interest rate cut is widely expected.

Market Prices in Aggressive Rate Cuts

According to the CME FedWatch Tool, traders are fully pricing in a 25-basis-point cut this week. Deutsche Bank projects an additional 25 bps cuts at each of the Fed’s remaining three meetings this year, which would lower the federal funds rate to 3.50%-3.75%.

Expectations of looser policy have weighed on the dollar, reducing its yield advantage. Market focus now turns to Chair Jerome Powell’s press conference, where his tone will shape views on the Fed’s policy path into year-end.

Fed Board Developments Add to Focus

On Monday, the US Senate narrowly confirmed Stephen Miran to the Fed Board of Governors, replacing Adriana Kugler. Meanwhile, a US appeals court rejected an attempt to remove Governor Lisa Cook, reinforcing the central bank’s independence after weeks of uncertainty.

Retail Sales Data Could Shift Expectations

Tuesday’s US Retail Sales report, due at 12:30 GMT, is expected to show a 0.3% rise. A stronger reading could temper expectations of deeper easing, while weaker figures may bolster bets on further cuts.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is trading at 97.20, testing key support after slipping below its 50-day EMA at 97.66. The broader structure shows consistent lower highs since early September, highlighting ongoing bearish pressure.

A descending trendline continues to cap recovery attempts, while the RSI at 41 points to weakening momentum without entering oversold territory.

Immediate support is marked near 97.10, and a break lower could expose 96.62. On the upside, the index would need to reclaim 97.66 and the descending trendline to shift sentiment back toward neutral.

GBP/USD Technical Analysis

The GBP/USD pair is holding near $1.3615, trading within a rising channel that has guided price action higher since early September. The move reflects a strong sequence of higher lows, signaling steady buying interest.

The 50-EMA at $1.3566 is providing immediate dynamic support, while the 200-EMA at $1.3515 underpins the broader uptrend.

A break above resistance at $1.3648 could open the path toward $1.3678 and $1.3714. On the downside, failure to hold above $1.3590 would expose supports at $1.3552 and $1.3520. Overall, the trend bias favors buyers.

EUR/USD Technical Forecast

The EUR/USD pair is trading at $1.1776, consolidating after testing resistance near $1.1800. Price action has been supported by an ascending trendline from September lows, showing buyers stepping in on each dip.

The 50-EMA at $1.1736 is acting as immediate support, while the 200-EMA at $1.1698 underpins the broader bullish structure.

A clear break above $1.1800 could trigger momentum toward $1.1830–$1.1857, while a drop under $1.1750 would expose support at $1.1723. For now, the trend bias remains bullish as long as the pair holds above its rising trendline.