US Dollar Forecast: Gains on Trade Talks and Fed Clarity – GBP/USD and EUR/USD

Market Overview

The US Dollar Index (DXY) climbed back to 99.71 in early Friday trading, retracing prior losses. The move reflects renewed optimism around global trade and a stable Fed policy outlook.

Trump Calms Markets with Fed Reassurance

President Trump’s assurance that Federal Reserve Chair Jerome Powell will remain in his role helped stabilize investor sentiment. The statement came amid broader trade negotiations, with 18 countries submitting proposals and meetings scheduled with 34 nations this week—supportive signs that trade tensions may ease.

Economic Data Offers Mixed Signals

Labor market data was mixed. Initial jobless claims rose to 222,000—slightly above expectations—while continuing claims declined by 37,000.

Meanwhile, S&P Global’s April flash Composite PMI slipped to 51.2 from 53.5, reflecting softer business activity, particularly in the services sector.

Manufacturing saw a slight uptick, but not enough to shift the overall tone.

Rate Cut Expectations Anchor Dollar

Despite mixed economic signals, markets continue to price in potential rate cuts by the Federal Reserve. Fed officials remain cautious but open to easing if needed.

For now, the dollar remains supported by policy continuity and trade diplomacy, even as economic growth shows signs of slowing.

US Dollar Index (DXY) – Technical Analysis

The U.S. Dollar Index (DXY) is stabilizing near $99.71, holding just above a rising trendline and the short-term pivot at $99.54. Price action has quietly shifted bullish, carving out a near-term uptrend that traders are watching closely.

Immediate resistance stands at $100.29, followed by the more consequential barrier at $100.97. Support comes in at $99.00, with next-line defense at $98.10.
As long as DXY holds above $99.00, the bias leans upward.

A decisive move through $100.29 could open room toward $100.97. But momentum must stick—any dip below trendline support risks reversing the recent gains.

GBP/USD Technical Analysis

Sterling is clinging to the $1.3300 mark after bouncing off ascending trendline support near $1.3274. Despite recent pressure, the broader trend remains intact. The pair is trapped between the 50 EMA at $1.3303 and the $1.3347 resistance.

If bulls can break above that ceiling, they could target $1.3424 next. Support rests at $1.3274, and deeper downside levels include $1.3209 and $1.3144, which aligns with the 200 EMA.

As long as $1.3274 holds, the trend remains constructive. A clean break above $1.3347 could trigger upside momentum, while a drop below trendline support would caution longs.

EUR/USD Technical Forecast

The euro is attempting to steady near $1.1350, just beneath a descending trendline and the key pivot at $1.1393. Recent price action remains heavy, with rallies capped below the 50 EMA at $1.1385, keeping short-term sentiment cautious.

Immediate resistance is seen at $1.1393, followed by $1.1439. Support sits at $1.1306, with a deeper floor near $1.1246, just above the 200 EMA at $1.1250.

Unless EUR/USD breaks above $1.1393 with volume, the downtrend remains intact. Below $1.1306, sellers may retest $1.1246. For now, the chart favors caution.