US Dollar Forecast: DXY Tests $97.60 Resistance After Fed Minutes
Published: February 18, 2026
Author: Arslan Ali
Key Points
- The US Dollar Index (DXY) is hovering near the $97.60 resistance level as the Federal Reserve's minutes have tempered expectations for rate cuts.
- GBP/USD is forming a tight triangle near $1.3570, indicating a potential breakout.
- EUR/USD is defending the $1.1820 demand zone while testing resistance levels at $1.1927 and $1.1997.
Market Overview
The US dollar has maintained its upward momentum, trading around $97.20. This strength is attributed to investor uncertainty regarding potential US interest rate cuts. Additionally, positive economic indicators and increased business confidence have contributed to the dollar's strength, alongside a perception that President Trump may avoid aggressive actions before the midterm elections.
Market participants are eagerly awaiting the release of the Federal Reserve's January policy meeting minutes, which are expected to provide insights into future interest rate decisions.
US Dollar's Gains and Market Sentiment
Despite the dollar's gains, the positive developments in US-Iran nuclear talks have dampened safe-haven demand for the dollar, limiting its upward movement. Iranian Foreign Minister Abbas Araqchi indicated that while progress has been made, a final agreement is not imminent.
Technical Analysis
US Dollar Index (DXY)
The DXY is currently around $97.19, holding above the 0.382 Fibonacci level at $96.82 and eyeing the 0.5 retracement level at $97.21. The price action shows small-bodied candles with long wicks near $97.60, indicating mixed signals. The 50-period Exponential Moving Average (EMA) is flat, while the 200-period EMA is at $97.98, acting as a resistance ceiling.
Trade Idea: Consider buying if the price exceeds $97.62, targeting $97.98, with a stop-loss at $97.10.
GBP/USD
GBP/USD is trading around $1.3558, forming a tight triangle pattern. The price briefly dipped to $1.3497 support before rebounding, indicating buyer interest. The immediate resistance levels are at $1.3663 and $1.3733.
Trade Idea: Look to sell if the price drops below $1.3495, targeting $1.3420, with a stop-loss at $1.3585.
EUR/USD
EUR/USD is currently at $1.1845, maintaining above a rising trendline support from the $1.1580 low. The price has bounced off the $1.1820-$1.1830 demand zone, showing buyer interest. Resistance levels are at $1.1927 and $1.1997.
Trade Idea: Buy if the price breaks above $1.1870, targeting $1.1927, with a stop-loss at $1.1815.
Conclusion
The US dollar is experiencing upward pressure, influenced by economic confidence and geopolitical developments. Traders should monitor key resistance levels and the upcoming Fed minutes for further direction.