US Dollar Price Forecast: Fed Splits 4 Ways – Can GBP/USD and EUR/USD Still Push Higher?
Author: Arslan Ali
Updated: April 30, 2026
Key Points
- The Federal Reserve maintained the federal funds rate at 3.50–3.75% on April 29, with four dissenting votes, marking the highest level of internal division since 1992.
- Chair Powell's data-driven approach is dampening expectations for short-term rate cuts, enhancing the dollar's appeal as a safe-haven asset.
- EUR/USD is holding trendline support at 1.1657 but requires a close above 1.1717 to regain bullish momentum.
- GBP/USD is testing an ascending trendline support at 1.3500; a break below could expose the 1.3312–1.3245 demand zone.
Market Overview
The Federal Reserve's decision to keep interest rates steady reflects concerns over persistent inflation risks, particularly due to rising oil prices and geopolitical tensions in the Strait of Hormuz. This cautious stance has bolstered the US dollar's status as a safe-haven asset.
Eurozone Outlook
The European Central Bank (ECB) is expected to maintain its deposit facility rate at 2.00% during its upcoming meeting. Despite inflation rising to 2.6%, there are hawkish voices within the ECB advocating for caution before making any policy changes. Growth predictions for 2026 remain stable at around 0.9%.
UK Economic Conditions
UK inflation remains elevated at 3.3% year-on-year as of March, with the Bank of England anticipated to hold rates at 3.75% in their May meeting. The balance between high oil prices and a softening labor market presents a challenging scenario for policymakers.
Technical Analysis
DXY Dollar Index
The DXY index is currently at 98.68, constrained by a descending trendline since late March. A close above 99.18 could signal a bullish breakout, while failure to hold above 98.24 may lead to a retest of lower support levels.
GBP/USD Analysis
GBP/USD is trading at 1.35004, testing an ascending trendline at 1.3500. Key support levels to monitor include 1.3455 and 1.3381. A bounce above 1.3526 would favor bulls, while a break below the trendline could lead to a decline towards the 1.3312–1.3245 zone.
EUR/USD Analysis
EUR/USD is currently at 1.16942, finding support at the ascending trendline at 1.1657. The 200-period moving average is providing additional support at 1.1614. A decisive close above 1.1717 is needed for bullish momentum, while a break below the trendline could shift the bias towards 1.1574.
Conclusion
The current market dynamics, influenced by central bank policies and geopolitical tensions, create a complex environment for currency trading. Traders should remain vigilant of key technical levels and economic indicators as they navigate the evolving landscape.