US Dollar Price Forecast: DXY Holds 98.00 as Fed Stays Hawkish
Published: February 20, 2026
Key Points
- The US Dollar Index (DXY) remains above the 98.00 level, supported by a strong labor market.
- Initial Jobless Claims dropped to 206,000, indicating a robust labor market.
- Federal Reserve minutes reveal no immediate plans for interest rate cuts, bolstering the dollar.
- The DXY is testing resistance at 98.08 after reclaiming the 0.618 Fibonacci level at 97.61.
Market Overview
The US dollar is maintaining its bullish trend, staying well above the 98.00 mark. Recent data from the US Department of Labor indicates a significant drop in Initial Jobless Claims to 206,000 for the week ending February 14, down from a revised figure of 229,000 and better than the expected 225,000. This suggests a strong labor market, which is generally favorable for the US dollar.
Federal Reserve's Stance
The minutes from the Federal Open Market Committee (FOMC) meeting in January show that the Fed is not in a hurry to lower interest rates, especially with inflation still above the target of 2%. Most policymakers favor maintaining current rates, indicating a cautious approach to monetary policy. Traders are awaiting the preliminary US Q4 GDP and Personal Consumption Expenditures (PCE) data for further insights into the economy and inflation trends.
Technical Analysis of DXY
The US Dollar Index is currently hovering around 97.90-98.00, approaching the 98.08 resistance level after bouncing back from a low of 95.54. The price has reclaimed the 0.618 Fibonacci level at 97.61, suggesting strengthening momentum. The 50-period EMA around 97.20 supports the upward movement, while the 200-period EMA at 98.47 remains a significant resistance level. The RSI at 60 indicates steady bullish momentum. A break above 98.08 could target 98.47, while a rejection may lead to a decline towards 97.21.
GBP/USD and EUR/USD Forecasts
GBP/USD
GBP/USD is trading around 1.3470 after breaking below the key support level of 1.3516. The trend appears to be reversing, with the 50-period EMA turning lower around 1.3600. Immediate support is at 1.3435, with a further stop at 1.3391. A potential trade idea is to sell below 1.3460, targeting 1.3390 with a stop-loss above 1.3520.
EUR/USD
EUR/USD is currently at 1.1760, having slipped below the 1.1806 support level. The 50-period EMA is turning lower around 1.1850, indicating bearish momentum. Immediate support is at 1.1742, with a stop at 1.1672. A trade idea suggests selling below 1.1755, targeting 1.1675 with a stop-loss above 1.1810.
Conclusion
The US dollar's strength is supported by positive labor market data and a cautious Federal Reserve stance on interest rates. Traders should monitor key economic indicators and technical levels for potential trading opportunities in the USD, GBP, and EUR pairs.