US Dollar Price Forecast: Stabilises Ahead of US CPI Risk – GBP/USD and EUR/USD

Market Overview

The US Dollar Index (DXY) is trading near $98.40 in early Thursday dealings, stabilising after recent downside pressure. The index has struggled to build momentum as markets reassess the US growth and inflation outlook following a softer run of economic data and increasingly cautious central bank signals.

What Moved the Dollar on December 17

Wednesday’s session leaned mildly negative for the dollar as investors digested mixed global data and Federal Reserve commentary. While there was no major US data release, remarks from FOMC member Christopher Waller kept markets alert.

Waller reiterated that policy is restrictive but stressed the need for patience, reinforcing the view that rate cuts remain conditional rather than imminent.

Outside the US, UK CPI slowed to 3.2% year-on-year, down from 3.6% previously and below expectations of 3.5%, weakening sterling and offering only limited indirect support to the dollar. Meanwhile, Germany’s Ifo Business Climate Index fell to 87.6, missing forecasts and highlighting ongoing weakness in the eurozone economy.

December 18: Key US Data in Focus

Thursday brings heavier US macro risk. US CPI year-on-year is forecast at 3.1%, up slightly from 3.0% previously, which could test market confidence in near-term easing. Initial Jobless Claims are expected at 224,000, improving from 236,000, signalling a still-resilient labour market. The Philadelphia Fed Manufacturing Index is forecast to rebound to 2.5 from -1.7, suggesting tentative regional stabilisation.

Together, these releases will shape expectations for US rates and determine whether the dollar can regain upside traction into year-end.

US Dollar Index (DXY) – Technical Analysis

The US Dollar Index is trading near 98.38 on the 2-hour chart, consolidating after a sharp slide within a clearly defined descending channel that has guided price lower since late November. Recent candlesticks show smaller bodies and overlapping ranges around 98.20–98.40, signaling hesitation rather than fresh selling pressure.

Price remains capped below the 50-EMA near 98.60 and the 100-EMA around 99.05, keeping the short-term structure tilted lower. Channel resistance aligns near 99.20–99.30, a zone that also overlaps with prior support turned resistance.

On the downside, buyers have repeatedly defended 98.10, followed by 97.85, which marks the channel base. RSI has rebounded toward 50, reflecting stabilizing momentum without a bullish shift. Trade idea is to sell rallies toward 99.20, targeting 98.10, with a stop above 99.60.

GBP/USD Technical Analysis

EUR/USD Technical Forecast

EUR/USD is trading near $1.1746 on the 2-hour chart, consolidating after pulling back from recent highs just below $1.1780. The broader structure remains constructive, with price holding above a rising trendline drawn from late November. Recent candlesticks show smaller bodies and mixed wicks around $1.1735–$1.1750, pointing to consolidation rather than renewed selling pressure.

The pair is supported by the 50-EMA near $1.1735, while the 100-EMA around $1.1650 continues to slope higher, reinforcing the medium-term uptrend. Immediate resistance sits at $1.1765, followed by $1.1805, where prior upside attempts stalled. A sustained break above this zone would signal renewed bullish momentum.

On the downside, initial support is seen at $1.1735, then $1.1704, aligning with horizontal support and trendline confluence. RSI is hovering near 50, reflecting neutral momentum and a pause rather than a trend reversal. Trade idea is to buy dips near $1.1735, targeting $1.1805, with a stop below $1.1700.