US Dollar Forecast: Struggles Near Pivot as PMI and BOE Speech Loom – GBP/USD and EUR/USD

By:

Arslan Ali

Published: Mar 24, 2025, 08:41 GMT+00:00

Key Points:

The U.S. Dollar Index hovers near $104.00 as PMI data and trade policy uncertainty weigh on market sentiment.
Flash Manufacturing PMI forecast at 51.9 vs. 52.7 prior may signal slowing U.S. economic momentum in March.
Hawkish Fed tone fails to lift the dollar as traders remain cautious amid tariff and geopolitical concerns.

In this article:

GBP/USD

-0.10%

EUR/USD

-0.04%

The U.S. Dollar Index (DXY) has slipped from its recent highs and is now hovering near the 104.00 mark, reflecting growing investor caution. The dollar’s three-day winning streak has paused as markets weigh concerns about a potential slowdown in U.S. economic activity and continued trade uncertainty under the Trump administration.

The spotlight now shifts to today’s flash PMI data, which may offer clarity on near-term economic strength. The S&P Global Flash Manufacturing PMI is due at 1:45 PM GMT, with a forecast of 51.9, slightly down from the previous 52.7. The Flash Services PMI is also expected at 1:45 PM GMT, forecast at 51.2 versus the prior 51.0.

Trade Policy Uncertainty Limits Dollar Upside

Despite recent hawkish commentary from Federal Reserve Chair Jerome Powell, who pointed to a strong labor market and inflation nearing target, the dollar is struggling to maintain momentum. Powell’s remarks reinforced the Fed’s cautious tone but did little to lift the dollar amid conflicting policy signals.

President Trump’s tariff policy remains a source of uncertainty. Earlier this month, his administration proposed imposing significant fees on China-linked shipping, a move that has disrupted supply chains and pressured key U.S. sectors, including agriculture and energy.

Investors are now waiting to see if these trade stances soften following reports of renewed talks with Chinese officials.

Geopolitical Talks Ease Tensions, but Dollar Remains Vulnerable

Geopolitical developments have offered some support to risk sentiment, but not enough to drive sustained strength in the dollar. Over the weekend, U.S. and Ukrainian officials met in Riyadh, with the Biden administration pushing for a ceasefire in the Ukraine conflict.

Further discussions between U.S. and Russian representatives are expected later today. While these talks reduce short-term geopolitical risk, the dollar remains under pressure amid persistent concerns around trade policy and global economic growth.

Market participants are closely monitoring the upcoming U.S. PMI readings and a scheduled speech by Bank of England Governor Andrew Bailey at 6:00 PM GMT for further direction.

US Dollar Index (DXY) – Technical Analysis

Dollar Index Price Chart – Source: Tradingview

The Dollar Index (DXY) is trading just under its pivot point at $104.261, last seen near $103.979, essentially flat on the day. While the 50-day EMA at $103.827 is acting as near-term support, the broader setup remains cautious. Price remains below the 200-day EMA at $104.413, suggesting lingering downside pressure unless bulls reclaim the pivot.

A break above $104.261 could shift short-term momentum toward resistance at $104.903, with $105.429 as the next upside level.

On the flip side, a move below $103.763 may open the door for a drop to $103.211. For now, the index is drifting sideways, and traders will need a clear catalyst—possibly from upcoming economic data—to determine the next directional bias.

GBP/USD Technical Analysis

GBP/USD Price Chart – Source: Tradingview

GBP/USD is hovering just below its pivot point at $1.29527, trading around $1.29487 in early session moves. The pair is sandwiched between key technical levels, with the 50-day EMA nearly aligned at $1.29523—acting as immediate pressure.

A decisive close above the pivot could trigger a push toward $1.29853, with a further move to $1.30141 if momentum builds.

On the downside, if support at $1.29092 fails, the pair could retreat to $1.28602, where the 200-day EMA near $1.28766 might attract dip-buyers.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

EUR/USD is treading water around $1.08424, holding just below its key pivot point at $1.08598. This narrow consolidation reflects market hesitation ahead of upcoming U.S. economic data. The 50-day EMA sits almost exactly at the pivot ($1.08590), reinforcing its importance as a pressure point.

A clean break above this level could shift the short-term bias to bullish, opening room toward resistance at $1.09125 and $1.09540. On the flip side, if the pair slips below $1.08049 support, sellers may push it toward $1.07643.

The broader trend remains neutral for now, with price caught between moving averages and tight ranges. Traders should watch for a decisive move through $1.08598 to get a clearer sense of directional momentum.

About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.