US Dollar Price Forecast: DXY Eyes 99 Ahead of CPI – Can GBP/USD and EUR/USD Hold?
By Arslan Ali | Published: Mar 10, 2026
Key Points
- DXY holds near 99 as Middle East tensions boost safe-haven demand ahead of CPI data.
- Markets price a 95% chance of no Fed rate cut despite weak payrolls and 4.4% unemployment.
- CPI forecast at 2.4% headline, 2.5% core - strong data could extend US dollar gains.
Market Overview
In early European trading, the US Dollar Index (DXY) remains in demand near the 99.00 level, currently trading at 98.75, up 0.03%. The increase in demand for the dollar is attributed to rising tensions in the Middle East and the anticipation of upcoming US Consumer Price Index (CPI) data.
Middle East Tensions Drive Up Safe-Haven Demand
The US dollar has gained strength due to escalating uncertainties in the Middle East. Iran's Islamic Revolutionary Guard Corps has stated that it will dictate the terms of the conflict, warning that it could disrupt oil supplies if US and Israeli attacks continue. President Trump has also indicated a strong US response to any threats to oil flow through the Strait of Hormuz, further increasing demand for the dollar as a safe haven.
US Inflation Fears Bolster the Dollar
Concerns over rising inflation are causing market jitters, leading to expectations that the Federal Reserve will maintain high interest rates. The CME FedWatch tool indicates a 95% probability that the Fed will not cut rates in the upcoming March meeting. However, the recent employment report showed a decline in payrolls by 92,000 and an increase in the unemployment rate to 4.4%, complicating the Fed's position.
Market Eyes on Wednesday’s US CPI Data
Analysts are eagerly awaiting the US CPI release, with expectations of a 2.4% year-on-year increase in headline CPI and 2.5% in core CPI. A stronger-than-expected inflation print could further bolster the dollar, while worsening conditions in the Middle East may continue to support the DXY's upward trend.
Technical Analysis
U.S. Dollar Index
The DXY is currently trading around 98.59, having slipped below the 0.50 Fibonacci level of 98.62. The index has failed to maintain gains above 99.68, indicating a potential loss of momentum. Key support levels are at 98.37 and 97.55, while resistance is noted at 99.18 and 99.68.
GBP/USD
GBP/USD is trading at $1.3461 after breaking through channel resistance. The immediate resistance to watch is at $1.3489, with support at $1.3410.
EUR/USD
EUR/USD is trading near $1.1652, rebounding from $1.1530. The next resistance level is at $1.1679, with support at $1.1600.