US Dollar Price Forecast: Steady Ahead of Powell Speech; GBP/USD and EUR/USD

Market Overview

During the European session on Tuesday, the US Dollar Index (DXY) traded steadily near $99.25, as investors reacted to a softer stance from President Donald Trump on China tariffs. Attention now turns to Federal Reserve Chair Jerome Powell’s upcoming remarks, which could guide short-term market sentiment.

Trade Easing Prospects Support the Dollar

After threatening 100% tariffs on Chinese imports last week, President Trump eased his rhetoric, saying, “Don’t worry about China, it will all be fine.”

US Treasury Secretary Scott Bessent also confirmed plans for Trump to meet President Xi Jinping later this month, boosting hopes of renewed trade cooperation.

These signals of de-escalation have supported the dollar by reducing fears of further global economic strain.

Fed Outlook May Cap Dollar Strength

However, dovish tones from Fed officials are tempering gains. Philadelphia Fed President Anna Paulson suggested additional rate cuts may be needed to sustain employment growth. Markets now price in a 25-basis-point cut in October and another in December, according to the CME FedWatch tool.

Fiscal Stalemate Adds Caution

Meanwhile, the ongoing US government shutdown, entering its third week, continues to weigh on sentiment. A prolonged impasse could dent growth expectations and trigger selling pressure on the dollar. Traders remain focused on Powell’s speech and developments in US-China talks for direction.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is trading around $99.25, showing consolidation after its recent advance. The index remains supported by the ascending trendline and key moving averages, the 50-day EMA near $98.76 and the 200-day EMA around $98.17. Holding above $98.70 keeps the short-term outlook constructive, with resistance seen at $99.57 and $100.25.

The RSI near 59 signals neutral momentum, suggesting room for either a retest of lower support or a fresh upward move. A close above $99.57 may confirm renewed bullish momentum toward the $100.25–$100.85 region, while a drop below $98.70 could shift bias back toward $98.03. Overall, DXY maintains a cautiously bullish tone.

GBP/USD Technical Analysis

The GBP/USD pair is trading near $1.3279, extending its decline below both the 50-day EMA ($1.3381) and 200-day EMA ($1.3449), reinforcing a bearish structure. The pair continues to respect the descending trendline from September highs, with resistance around $1.3368 limiting upside attempts.

The RSI near 35 reflects weak momentum, suggesting that sellers still dominate the market. Immediate support lies at $1.3260, followed by $1.3180. A break below these levels could accelerate losses toward $1.3100. Conversely, a close above $1.3370 would be needed to confirm short-term stabilization and potential recovery.

EUR/USD Technical Forecast

The EUR/USD pair is trading around $1.1570, remaining under pressure within a clear descending channel. The pair is capped by the 50-day EMA at $1.1636 and 200-day EMA near $1.1686, both reinforcing the bearish trend. Immediate support lies around $1.1540, and a break below could expose the next downside target at $1.1470.

The RSI near 41 indicates weak buying momentum, keeping the short-term outlook cautious. A recovery above $1.1630 is needed to challenge the channel’s upper boundary and potentially shift sentiment toward consolidation.