US Dollar Price Forecast: Fed, PCE and NFP in Focus

Published: July 27, 2026

Author: Arslan Ali

Key Points

• The upcoming Federal Reserve meeting, GDP data, PCE inflation, and payroll figures are set to dominate forex markets this week.
• Strong U.S. retail sales and labor market data bolster expectations of a resilient U.S. economy.
• The DXY index remains above key moving averages, with a break above 101.65 strengthening the medium-term bullish outlook.
• EUR/USD is under pressure, remaining below key resistance levels, while GBP/USD is also facing challenges below major moving averages.

Market Overview

The U.S. dollar, euro, and British pound are entering a critical week as investors prepare for the Federal Reserve's meeting scheduled for July 29-30. Most analysts anticipate that the Fed will maintain current interest rates, but they will be closely monitoring comments from Chair Jerome Powell, especially in light of recent strong economic data.

Economic Indicators

Recent data shows that June retail sales increased by 0.2%, with the control group rising by 0.4%. Additionally, initial claims for unemployment benefits fell to 208,000, marking a three-month low, which underscores the strength of the consumer and labor market. This week will also see the release of second-quarter GDP, PCE inflation data for June, and July non-farm payrolls, all of which could influence market sentiment for the latter half of the year.

Central Bank Outlook

The European Central Bank (ECB) has decided to keep its deposit rate at 2.25%, citing a gradual approach as inflation trends toward its 2% target. ECB President Christine Lagarde noted that growth remains weak, and the bank is assessing the impact of trade and energy costs on the economy.

Meanwhile, the British pound is supported by expectations that the Bank of England will proceed cautiously after maintaining the Bank Rate at 3.75%. The UK is facing a balancing act between controlling inflation and managing wage growth amid a cooling labor market. Key economic indicators such as mortgage approvals, consumer credit, and business surveys will be released this week ahead of the next Bank of England meeting.

Technical Analysis

Dollar Index (DXY)

The U.S. Dollar Index is maintaining a healthy uptrend, currently trading at 101.28. It has bounced off support in the 100.50 zone, with the 50-day EMA at 101.12 and the 100-day EMA at 101.01 providing support. Resistance levels are identified at 101.65, 102.06, and 102.42, while initial support is at 101.06, followed by 100.50 and 99.92.

GBP/USD

GBP/USD is currently trading at $1.3333, showing signs of stabilization below a major resistance area. The 50-day EMA is at 1.3378, and the 100-day EMA is at 1.3377. Initial support is at 1.3305, with further support at 1.3218. Resistance levels are at 1.3356, 1.3400, and 1.3430. A move below 1.3305 could extend losses, while a close above 1.3356 would weaken the downtrend.

EUR/USD

EUR/USD remains bearish, trading at 1.1395. The pair has tested the upper boundary of a triangle pattern but failed to break through. The 50-day EMA is at 1.1408, and the 100-day EMA is at 1.1420. Initial support is at 1.1364, with further support at 1.1325. Resistance is at 1.1410, 1.1443, and 1.1481. The short-term bias remains bearish unless the pair can break above 1.1410.

Conclusion

As the forex market anticipates significant economic data and central bank meetings, traders should remain vigilant regarding the U.S. dollar's performance against major currencies. The upcoming data releases could provide critical insights into the economic landscape and influence trading strategies.