US Dollar Price Forecast: Trump-Xi Talks Lift DXY – Can GBP/USD and EUR/USD Recover?

Dollar Firms as Hotter Inflation Data and Diplomatic Developments Shape Currency Markets

The U.S. dollar edged higher Wednesday (May 15, 2026) after the April consumer prices data released Tuesday proved stickier than anticipated and dented expectations for a rate cut from the U.S. Federal Reserve. Recent price rises have been driven by shelter and fuel. The conditional ceasefire signed between the U.S. and Iran is also having an impact on oil trading via the Strait of Hormuz.

A stronger dollar put pressure on the euro in light of the euro area and U.S. divergence in interest rates, and with the ECB in no mood to take aggressive action to lower them, while uncertainty continued to surround the Bank of England (BoE) as it relies on a steady flow of data to guide its next moves with regard to sterling.

Meanwhile, high expectations of theU.S.-China meeting between President Trump and President Xi in Beijing have also been a key driver of the U.S. dollar. The meeting will focus on trade and the tech war between the two largest economies in the world; if a deal is reached or any significant progress made, there could be a positive impact on risk sentiment, including on the supply chains of the U.S. dollar. However, the agreement made between the U.S. and Iran in reducing tension could have lessened some of the demand for the U.S. dollar as a safe haven. Today’s CPI has also shown that the Fed would likely take a data-dependent approach to reducing interest rates.

DXY Reclaims $99.16 – White Descending Channel Rejected

The DXY trades around $99.17 on the 4H time frame after rallying from $98.44. Large green engulfing candles reclaimed the red 50-period MA that resides near $98.80, and the price rejected the white descending trendline that has been in place since April’s highs while holding the blue support line near $98.00. Higher lows are formed inside the short-term trading base. The recent bullish continuation moved above the $99.00 pivot point.

The RSI is now above 52, indicating momentum has returned without becoming overbought. The Fib retracement from May’s pivot projects the $99.33 to $99.66 area as the next cluster of resistance. The volume profile indicates that $98.80 serves as a floor, where buying is absorbed. The price structure is neutral to bullish above the $98.80 level, as the market tests the ceiling of the white descending channel.

Trade Idea: Buy $99.16 targeting $99.66, stop loss at $98.80.

GBP/USD Defends $1.351 – Rising Channel Floor Holds

The GBP/USD trades around $1.3513 on the 2H time frame, as the price defended the white ascending trendline that has been in place since early May with green bullish rejection candlesticks after the recent test of the $1.35099 Fib support level. The price trades under the red moving average that now sits at $1.353. Higher lows continue to form in the channel.

Recent mixed candlesticks continue to form at the $1.3510 price floor as the market continues to absorb buying demand. The RSI trades near 52 with a flat line indicating a lack of momentum. The price is approaching the $1.3557 to $1.3577 cluster of resistance next. The volume profile indicates that $1.351 remains as a key pivot area. The price structure is bullish above the $1.350 level as the price forms in the white rising channel.

Trade Idea: Buy $1.3513 targeting $1.3557, stop loss at $1.3500.

EUR/USD Slides to $1.170 – Blue Ascending Trendline Under Pressure

The EUR/USD trades around $1.1703 on the 2H time frame, as it trades along the blue ascending trendline that has been in place since mid-April, following its recent rejection at the red moving average that resides at $1.178. Recent red candlesticks continue to form lower highs, while a red engulfing candle forms near the $1.174 price levels.

The price remains above the $1.169 support level as indicated by the Fib retracement. However, bearish distribution wicks are forming. The RSI is below 48, indicating the selling momentum is picking up.

The overhead resistance at the $1.174 is currently in play. The volume profile indicates heavy selling supply at the $1.171 price area. The price structure is weakening below the $1.174 level, while the price trades near the floor of the blue ascending channel.

Trade Idea: Sell $1.1703 targeting $1.166, stop loss at $1.174.