US Dollar Price Forecast: Dollar Strengthens as Truce Enters Week 9

Published: June 04, 2026

Author: Arslan Ali

Key Points

• The US-Iran ceasefire has lasted over nine weeks, leading to increased tanker traffic through the Strait of Hormuz.
• The US Dollar Index (DXY) rose to $99.46, breaking into a blue ascending channel with higher lows.
• EUR/USD maintained support at $1.1608, while GBP/USD defended the rising channel floor at $1.3426.

Market Overview

On June 4, 2026, the US dollar remained steady, bolstered by inflation concerns following stronger-than-expected Consumer Price Index (CPI) data for April. The headline CPI was reported at 3.8%, and core CPI at 4.1%, which has led to diminished expectations for near-term interest rate cuts by the Federal Reserve under Chair Kevin Warsh. This has shifted the outlook towards a "higher-for-longer" policy stance.

The euro faced pressure from the strong dollar and a more accommodative stance from the European Central Bank, influenced by softer economic data from the Eurozone. The British pound showed mixed performance, reflecting the Bank of England's data-dependent approach amid varied economic indicators and muted global risk sentiment.

Technical Analysis

DXY Analysis

The DXY climbed to $99.46, with a breakout above the blue ascending channel gaining momentum. The price action has shown higher highs and higher lows, with rejection wicks absorbing selling pressure around the $99.00 support level. The Relative Strength Index (RSI) is positioned above 52, indicating positive momentum without being overbought.

Trade Idea: Buy at $99.46, targeting $99.72, with a stop at $99.18.

GBP/USD Analysis

GBP/USD remained steady at $1.3426, successfully defending the rising channel floor. The price action indicates that buyers are absorbing selling pressure at the support level near $1.340. The RSI is near 52, suggesting neutral momentum.

Trade Idea: Buy at $1.3426, targeting $1.348, with a stop at $1.340.

EUR/USD Analysis

EUR/USD traded at $1.1608, testing the blue trendline support. The price action has shown bearish wicks indicating selling pressure, but buyers are absorbing supply near this level. The RSI is around 48, indicating neutral momentum.

Trade Idea: Buy at $1.1608, targeting $1.164, with a stop at $1.158.

Conclusion

The US dollar's strength is underpinned by inflation concerns and a stable geopolitical environment due to the ongoing US-Iran ceasefire. Traders are advised to monitor upcoming economic data releases and Federal Reserve commentary for further market direction.