US Dollar Forecast: Slides After Tariff Rumors Rejected -GBP/USD and EUR/USD

Market Overview

The U.S. Dollar Index (DXY), which tracks the dollar’s value against six major currencies, slipped to 102.68 on Tuesday, erasing gains from a brief rally last week. Market sentiment had improved on speculation of a potential 90-day tariff suspension on all nations except China—an idea that quickly unraveled.

White House Denial Rekindles Risk-Off Sentiment

Comments from National Economic Council Director Kevin Hassett initially stoked hopes of a de-escalation in trade tensions, lifting equities and supporting the dollar. But a swift denial from the White House reversed the mood. The Dow Jones Industrial Average fell more than 1.5%, while the S&P 500 and Nasdaq also turned negative.

The dollar, which had benefited from safe-haven demand, reversed course. The DXY retreated from highs near 103.00, weighed down by resurgent risk aversion and shifting market expectations.

CPI Data Looms

While the White House points to progress on disinflation—particularly in food and energy—investors remain cautious. All eyes now turn to Thursday’s March CPI data, expected to offer fresh clues on inflation trends and potential Fed policy moves.

The reading could clarify whether the recent pullback in the dollar is a temporary reaction or the start of a broader correction.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is holding above its pivot point at $102.85 after bouncing from trendline support within a rising channel. Price action remains constructive in the short term, currently trading at $103.13. Immediate resistance is seen at $103.54, followed by the 200 EMA near $103.72.

On the downside, $102.85 acts as the pivot, with next support at $102.18. The 50 EMA sits at $103.03 and is starting to flatten—offering near-term guidance. While bulls defended channel support, DXY still trades below key moving averages, suggesting upside remains fragile.

A break above $103.54 could signal strength toward $104.04, but failure to hold above $102.85 may shift momentum back to the bears.

GBP/USD Technical Analysis

The British pound (GBP/USD) is holding just above trendline support at $1.2745 after last week’s sharp reversal from the $1.3115 high. GBP/USD is trading below both the 50 EMA at $1.2921 and the 200 EMA at $1.2846, signaling weakening momentum.

Immediate resistance stands at $1.2865, followed by $1.3019. On the downside, if the pair breaks beneath the $1.2745 pivot, it could trigger further downside toward $1.2636.

Price action remains bearish in the short term, with the recent bounce looking more like a technical pause than a reversal.

EUR/USD Technical Forecast

EUR/USD is clinging to the $1.0943 level, caught between soft upside pressure and fading momentum. The pair is trading above its ascending trendline and just above the 200 EMA at $1.0859, which continues to offer strong support. The pivot point stands near $1.0920, now a crucial area to watch.

Immediate resistance lies at $1.1003, followed by $1.1101. On the downside, a break below $1.0920 could trigger a retest of $1.0872 or even $1.0888. The 50 EMA is at $1.0944 and flattening, suggesting consolidation.

Overall, EUR/USD needs a close above $1.1003 to revive bullish momentum—otherwise, it risks slipping into a corrective pullback.