US Dollar Forecast: Awaits Key U.S. Data While Euro and Pound Slide – GBP/USD and EUR/USD

Market Overview

The U.S. dollar is holding ground ahead of key economic data, including the ISM Manufacturing PMI, JOLTS job openings, and construction spending. The ISM print is expected to dip to 49.5 from 50.3, signaling softer factory activity. Fed commentary from FOMC’s Barkin could offer further policy clues as markets price in rate cuts later this year.

EUR/USD slipped after weaker-than-expected Eurozone manufacturing data. Spain (49.5), Italy (46.6), France (48.5), and Germany (48.3) all came in below forecast, confirming broad industrial weakness. Eurozone CPI data and a speech from ECB President Lagarde remain in focus for euro traders.

GBP/USD fell after the UK’s Final Manufacturing PMI dropped to 44.9, below the 44.6 estimate. Nationwide house price data was flat at 0.0%, undershooting the 0.2% forecast, reinforcing weak domestic sentiment.  Markets now turn to U.S. macro data for the next directional move.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is holding steady near $104.22, with price action compressing between the 50 EMA at $104.14 and resistance at $104.67.

The index remains stuck in a tight ascending channel, lacking clear follow-through after multiple tests of the upper and lower bounds. Support holds around $104.00 and lower at $103.79, both near the midline of the channel structure.

Technically, DXY is showing signs of indecision as it hovers beneath the 200 EMA at $104.97. Bulls need a decisive breakout above $104.67 to reclaim momentum, while a move below $104.00 could trigger a pullback toward $103.50. Until then, expect range-bound action.

GBP/USD Technical Analysis

GBP/USD is trading around $1.2908, sliding just beneath its 50 EMA ($1.2932) and testing the 200 EMA ($1.2904), suggesting a potential shift in short-term momentum.

The pair has been stuck in a broader consolidation pattern, defined by lower highs and supported by a gradually ascending trendline. The rejection near $1.2966 once again confirmed overhead pressure, while the price now teeters at a technical crossroads.

If buyers fail to defend the 200 EMA, a breakdown could expose $1.2866 next. Conversely, regaining $1.2932 could revive a push back toward $1.2966 and possibly $1.3014. Until then, GBP/USD remains directionless, caught between structural support and descending resistance.

EUR/USD Technical Forecast

EUR/USD is trading around $1.0802 after failing to sustain momentum above the descending trendline and slipping back below the $1.0827 pivot. The pair remains range-bound beneath the 50 EMA at $1.0814, while the 200 EMA sits well below at $1.0709, reinforcing longer-term support.

The rejection from the $1.0840s highlights persistent overhead resistance, and with recent candles showing upper wicks, bullish attempts continue to lose steam.

On the downside, immediate support lies at $1.0763. If that gives way, a deeper move toward $1.0708 is plausible. Bulls need to reclaim $1.0840 and break the trendline to shift bias. Until then, pressure remains tilted to the downside.