US Dollar Price Forecast: DXY Dips on Tariff Risk – Are GBP/USD & EUR/USD Set to Fly?
Published: February 26, 2026
Market Overview
The US Dollar Index (DXY) is experiencing downward pressure, trading around the 97.50 mark, primarily due to uncertainties surrounding US economic policy. Despite this, some analysts believe that the dollar's decline may be limited as expectations grow that the Federal Reserve (Fed) will maintain interest rates.
Dollar Pressured by Tariff Moves and Policy Uncertainty
President Trump has recently adjusted Section 122 tariffs, reducing them from a threatened 15% to 10%, which has raised concerns about the economic implications of these tariffs. The International Monetary Fund (IMF) head, Kristalina Georgieva, noted that these tariffs have contributed to rising inflation in the US. She suggested that a minor interest rate cut could stabilize jobs, but emphasized the need for serious action to manage national debt, further weighing on the dollar.
Fed Officials Signal Interest Rates Likely to Remain Steady
Despite the dollar's decline, Fed officials, including Chicago Fed President Austan Goolsbee and Boston Fed President Susan Collins, indicated that interest rates are likely to remain steady due to persistent inflation and a strong job market. This sentiment is providing some support to the dollar.
US Dollar Index Forecast
The DXY is currently around 97.63, with a support level at 97.40. The index has shown a series of small price movements, indicating that traders are buying on dips. Key resistance levels to watch are at 98.07, 98.41, and 98.83. A potential trading strategy includes buying the dollar if it breaks above 98.10, targeting 98.80, with a stop-loss set below 97.30.
GBP/USD Forecast
GBP/USD is trading at approximately 1.3536, forming a symmetrical triangle pattern. Key levels include resistance at 1.3575 and support at 1.3435. A breakout above 1.3580 could lead to a rally towards 1.3665, with a suggested stop-loss below 1.3520.
EUR/USD Forecast
EUR/USD is currently at 1.1805, facing resistance at a descending trendline around 1.1825-1.1850. Support levels are identified at 1.1773 and 1.1742. A potential trading strategy is to sell if the price breaks below 1.1790, targeting 1.1740 with a stop-loss above 1.1855.
Conclusion
The US Dollar is under pressure due to tariff uncertainties and inflation concerns, but expectations of steady interest rates may provide some support. Traders should monitor key levels in GBP/USD and EUR/USD for potential breakout opportunities.