US Dollar Price Forecast: DXY Holds $99.08 as Ceasefire Holds
Published: May 26, 2026
Key Highlights
- The US-Iran ceasefire has been maintained for over seven weeks, allowing for steady tanker traffic through the Strait of Hormuz.
- The US Dollar Index (DXY) is stable at $99.08, maintaining an upward trend with higher highs and higher lows.
- EUR/USD has faced resistance at $1.164 and is under bearish pressure, while GBP/USD has risen to $1.3472, showing resilience.
Market Overview
On May 26, 2026, the US dollar strengthened against major currencies following a higher-than-expected Consumer Price Index (CPI) report for April. This report heightened expectations that the Federal Reserve would need to maintain a vigilant stance on inflation, particularly driven by housing and energy costs.
Despite the conditional ceasefire with Iran reducing the demand for safe-haven assets, the CPI data served as a reminder for investors to prepare for potentially prolonged higher interest rates or a slower pace of rate cuts. The Federal Reserve's decisions will remain data-dependent, and market participants are advised to closely monitor upcoming economic indicators.
Technical Analysis
DXY Analysis
The DXY is currently trading at $99.08, supported by a blue ascending channel and a 50-period moving average at $98.90. The price action has shown bullish momentum with higher lows and rejection candles above the $99.00 pivot. Key resistance levels are identified between $99.17 and $99.36, while $98.97 serves as a critical support zone.
Trade Recommendation: Buy at $99.08; Target $99.36; Stop loss at $98.80.
GBP/USD Analysis
GBP/USD is trading at $1.3472, maintaining a bullish structure above the rising channel floor. The price has shown resilience with higher lows above $1.339, and the next resistance levels are projected between $1.348 and $1.353.
Trade Recommendation: Buy at $1.3472; Target $1.353; Stop loss at $1.339.
EUR/USD Analysis
EUR/USD is currently at $1.1604, facing resistance at $1.164. The price has printed lower highs, indicating a bearish trend, with key support levels at $1.158 and $1.156. The momentum appears to be fading as indicated by the RSI below 48.
Trade Recommendation: Sell at $1.1604; Target $1.156; Stop loss at $1.164.
Conclusion
The current market dynamics, influenced by geopolitical factors and economic data, suggest a cautious yet strategic approach for traders. The stability of the DXY and the movements in GBP/USD and EUR/USD will be critical to watch in the coming days as the economic landscape evolves.