US Dollar Slides Near $100 as Traders Brace for Fed Signals – EUR/USD and GBP/USD Outlook

📉 Dollar Faces Continued Pressure After Weak Data and Moody’s Downgrade

The US Dollar Index (DXY) remained under pressure in early Tuesday trading, hovering just above the key psychological level of 100.25. Traders have shown little appetite for the greenback amid persistent weakness in recent economic indicators and mounting expectations that the Federal Reserve could begin cutting rates in 2025.

Soft consumer price index (CPI), producer price index (PPI), and retail sales figures have fueled speculation that U.S. growth is slowing. On top of this, Moody’s downgrade of the U.S. credit rating last Friday has stirred new concerns about America’s fiscal outlook, adding to bearish sentiment around the dollar.

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🌐 US-China Tariff Pause Eases Risk, But Dollar Finds Limited Relief

A 90-day tariff pause in U.S.-China trade relations has helped reduce recession fears, offering the dollar some near-term support. However, analysts caution that this diplomatic truce is not enough to shift the broader bearish trend. Investors are now closely monitoring upcoming speeches from Fed officials, which could clarify the central bank’s stance and impact dollar momentum.

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📊 Technical Outlook: US Dollar Index (DXY) Near Breakdown Territory

The Dollar Index is testing a pivotal support zone near $100.05, where a multi-week ascending trendline intersects with horizontal demand. A mild breach below this level raises the risk of a sustained bearish move.

Key Resistance: $100.40–$100.62 (including the 50-day EMA)
Support Levels: $100.00, $99.55, and $99.17

The chart also shows a descending triangle pattern, typically a bearish continuation signal. If the dollar closes decisively below $100.00, expect downside targets at $99.55 and $99.17 to come into focus. A rebound above $100.62, however, could trigger a short-term rally toward $101.25.

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🇬🇧 GBP/USD Analysis: Bullish Momentum Builds Above $1.3344

The GBP/USD pair continues to advance, now trading around $1.3391, supported by a rising trendline and an upward-sloping 50-day EMA at $1.3319. The breakout above former resistance at $1.3344, which has turned into a fresh support level, suggests a bullish continuation.

Key Levels to Watch:

• Immediate resistance: $1.3403
• Breakout targets: $1.3442 and $1.3482
• Support: $1.3344

If buyers clear $1.3403 with strong volume, the pair could rally toward the next resistance zones. Failure to break higher may lead to a pullback toward the $1.3344 zone.

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🇪🇺 EUR/USD Technical Forecast: Trend Reversal in Motion

The EUR/USD pair has broken above a descending trendline and is now hovering near $1.1275, indicating a potential bullish reversal. The move was supported by a higher low at $1.1175 and a bullish crossover of the 50-EMA ($1.1214).

Key Technical Levels:

• Immediate resistance: $1.1275
• Bullish targets: $1.1323 and $1.1378
• Support zone: $1.1226

If the pair sustains a close above $1.1275, bulls could target further gains. However, a dip back below $1.1226 would undermine the breakout scenario. Traders should wait for confirmation from volume and candle closes to validate momentum.

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