US Dollar Price Forecast: Safe-Haven Unwinding Sinks DXY—Will EUR/USD Hold $1.1680?
Author: Arslan Ali
Published: April 10, 2026
Key Points
- DXY Trendline Breach: The ascending trendline from mid-March is faltering at $98.90, indicating a significant shift in Dollar sentiment.
- EUR/USD Breakout Test: Euro bulls are defending the $1.1680 zone; maintaining above $1.1650 keeps the path open to $1.1720.
- Sterling Support Confluence: GBP/USD finds strength at a confluence of Fibonacci levels and rising channel support near $1.3420.
Market Overview
The US Dollar Index (DXY) is struggling to maintain levels above 98.80-98.95 after a near 1% decline earlier in the week, reaching one-month lows. The decline in the dollar is attributed to easing geopolitical tensions, reducing the demand for safe-haven assets. Despite a slight rebound, the dollar remains below the psychologically significant 100 mark, indicating weakened demand.
Currency Performance
Both the Euro and Pound have managed to hold onto recent gains, supported by improved risk appetite and easing energy-driven inflation concerns. However, the Federal Reserve's tightening stance suggests that the dollar's weakness may allow the EUR and GBP to continue rising, albeit with slowing momentum due to profit-taking.
Technical Analysis
US Dollar Index (DXY)
The DXY is hovering just above the critical level of $98.90, with recent candlesticks indicating buying interest around $98.50. A break below this level could lead to further declines towards $98.00, while a recovery above $99.50 may signal a potential upside.
GBP/USD
GBP/USD is trading around $1.3420, showing stabilization within a rising channel. The confluence of Fibonacci support at this level suggests it may hold. A break above $1.3450 could resume upward momentum, while a drop below $1.3380 may indicate a shift in trend.
EUR/USD
EUR/USD is testing a bullish breakout at $1.1680 after surpassing a descending trendline and resistance at $1.1650. Holding above $1.1650 could lead to a rise towards $1.1720, but failure to maintain this level may result in a pullback.
Trade Ideas
- DXY: Sell if the price breaks below $98.50, targeting $98.00 with a stop-loss above $99.50.
- GBP/USD: Buy if the price breaks above $1.3450, targeting $1.3500 with a stop-loss below $1.3380.
- EUR/USD: Buy if the price ticks up near $1.1650, targeting $1.1720 with a stop-loss below $1.1600.
Conclusion
Market participants are closely monitoring U.S. inflation data and central bank signals, as shifts in risk perception could lead to volatility in currency markets. The current environment suggests a cautious approach as traders navigate through potential changes in macroeconomic conditions.