US Dollar Forecast: DXY Holds Firm as Traders Await ISM PMI – GBP/USD and EUR/USD Outlook

Market Overview

The US Dollar Index (DXY) saw a slight reduction in net long positions, according to the latest Commitment of Traders (COT) report from the Commodity Futures Trading Commission (CFTC). As of February 25, 2025, large speculators and hedge funds held a net long position of 15,732 contracts, marking a decline of 1,036 contracts from the previous week. Despite this minor pullback, positions remain near a five-month high, signaling sustained confidence in the dollar.

Market participants are closely watching upcoming US economic data releases for further direction.

Key reports scheduled for March 3 include the ISM Manufacturing PMI, projected at 50.6, and Construction Spending, expected to show a -0.1% decline. Additionally, FOMC Member Musalem’s speech could provide insight into the Federal Reserve’s monetary policy stance, influencing DXY’s next move.

Technically, the DXY remains above key support at 107.29, reinforcing its bullish bias. A strong ISM report or hawkish Fed signals could drive further gains, while weaker data may trigger a corrective move lower.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $107.32, up 0.02%, maintaining a bullish stance above the pivot point at $107.29. The 50-day EMA at $106.97 offers support, while the 200-day EMA at $107.42 suggests a key resistance zone ahead.

Immediate resistance stands at $107.95, followed by $108.51, which could cap further upside. On the downside, support is seen at $106.77, with a break below this level exposing $106.15. A bullish trend remains intact above $107.29, but a break below could shift momentum, triggering a sharper sell-off.

With interest rate expectations and macroeconomic data in focus, traders will watch whether DXY can maintain strength or face resistance-driven pullbacks.

GBP/USD Technical Analysis

The GBP/USD pair is trading at $1.25961, down 0.03%, as traders assess the strength of the pound against a resilient U.S. dollar. The pivot point at $1.25630 is a key threshold—remaining above it suggests a bullish bias, while a break below could invite stronger selling pressure.

Immediate resistance is at $1.26361, followed by a tougher ceiling at $1.27147. On the downside, key support lies at $1.24905, with deeper support at $1.24343. The 50-day EMA at $1.24124 and the 200-day EMA at $1.25302 indicate an upward trendline supporting the recent buying momentum.

For now, GBP/USD remains bullish above $1.25630, with an upward trendline favoring buyers. A break below $1.25630 could shift momentum, leading to sharper declines.

EUR/USD Technical Forecast

The EUR/USD pair is trading at $1.04050, slipping 0.02% as the euro struggles to gain momentum against the dollar. The pivot point at $1.04222 is a key level—staying below it reinforces a bearish outlook, while a breakout above could shift sentiment bullish.

Immediate resistance sits at $1.04837, with further hurdles at $1.05287. Meanwhile, support is seen at $1.03603, with a deeper floor at $1.03157. The 50-day EMA at $1.04416 and the 200-day EMA at $1.04228 are both acting as resistance, suggesting sellers remain in control.

For now, EUR/USD remains bearish unless it reclaims $1.04222. A drop below $1.03603 could accelerate selling, while a push above resistance might trigger fresh buying momentum.