US Dollar Price Forecast: GDP Growth Boosts DXY, Bond Yield, GBP/USD and EUR/USD Outlook

US Dollar Strengthens Amid GDP Growth; Yields Eye PCE Data

The US Dollar Index rose as GDP growth for Q3 exceeded forecasts, coming in at 3.1% versus the expected 2.8%. This stronger economic performance reinforced expectations for a resilient US economy, further supported by falling unemployment claims to 220K, down from 242K last week.

Meanwhile, the 10-year US Treasury yield, currently at 4.55%, saw mild fluctuations but remains poised for movement ahead of the Core PCE Price Index release, a critical inflation gauge for the Federal Reserve.

Strong consumer spending data expected Friday may sustain upward pressure on yields, signaling resilience in economic activity despite higher borrowing costs.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at 108.25, down 0.16%, as it consolidates above the pivot point at 107.93 on the 4-hour chart. Immediate resistance is seen at 108.53, with a breakout targeting 108.89.

On the downside, support lies at 107.57, with deeper protection at 107.19. Technical indicators suggest a cautiously bullish tone. The 50 EMA at 107.22 and 200 EMA at 106.19 highlight the index’s broader uptrend. Staying above the pivot supports a continuation of bullish momentum, while a break below 107.93 could signal a potential pullback.

Traders should keep an eye on movements around 108.53 to confirm strength or watch for dips toward key support levels.

US 10-year Bond Yields

The US 10-year bond yield currently trades near 4.55%, showing minor retracement after hitting resistance at 4.59%, aligning with a Fibonacci 0.236 retracement level. Recent yield increases reflect expectations of a prolonged Federal Reserve hawkish stance, supported by strong economic data.

Higher yields attract foreign investment, strengthening the US Dollar Index, which remains near multi-year highs.

However, rising yields may cap growth-sensitive assets like equities and commodities, while a stronger dollar pressures gold and emerging market currencies. If yields sustain above 4.50%, the USD Index could extend gains, signaling continued economic resilience but tighter financial conditions ahead.

Sterling Under Pressure as BOE Holds Rates

The British Pound (GBP) remains under pressure after the Bank of England held rates at 4.75% amid a split vote on monetary policy. Retail sales rose by a modest 0.2%, missing the 0.5% forecast, while public sector net borrowing fell to £11.2B, reflecting fiscal challenges.

Markets now await the BOE Quarterly Bulletin for further economic insights, as weaker CBI Realized Sales data (-9) hints at sluggish business conditions.

GBP/USD Technical Analysis

The GBP/USD pair is trading at 1.28074, up 0.05%, as it hovers near its 200 EMA at 1.28103 on the daily chart, signaling mixed sentiment. The pivot point at 1.25726 is key for directional clarity, with immediate resistance at 1.27112 and further upside potential toward 1.28650. Immediate support lies at 1.24210, with deeper protection at 1.23017.

While the 50 EMA at 1.27707 provides near-term bullish support, the pair’s inability to firmly clear the pivot suggests cautious optimism.

EUR/USD Technical Forecast

The EUR/USD pair is trading at 1.03425, up 0.21%, as it consolidates below its pivot point at 1.03789 on the daily chart. While the immediate trend remains slightly bullish, the pair faces stiff resistance at 1.04852, with a stronger barrier at 1.05706. Immediate support is positioned at 1.02813, with a deeper level at 1.02166.

The 50 EMA at 1.06253 and the 200 EMA at 1.07934 highlight bearish longer-term pressure, but a break above the pivot could trigger a bullish reversal, especially with the potential double-bottom pattern forming near 1.03789.

A failure to reclaim the pivot, however, could expose the pair to further declines toward key support levels.