US Dollar Forecast | Fed and BOE Speeches Shape Outlook for GBP/USD and EUR/USD

What to Know

• The US Dollar Index (DXY) holds near 99.99 as investors await upcoming Fed and BOE statements.
• October’s ADP jobs report beat forecasts with 42,000 new positions, but the ISM Services PMI showed only modest growth.
• GBP/USD remains capped below $1.3140, while EUR/USD struggles to reclaim the $1.1580–$1.1620 zone.
• Traders expect cautious tones from central bankers, which could define the dollar’s short-term path.

The US Dollar steadied near the 99.99 mark on Thursday as traders assessed mixed economic data and shifted focus toward central bank events in both the United States and the United Kingdom. With the Federal Reserve and Bank of England set to deliver key speeches this week, markets are bracing for renewed volatility across major currency pairs, particularly GBP/USD and EUR/USD.

The dollar’s recent movement reflects a market caught between optimism about steady growth and caution surrounding the next policy moves. Despite upbeat employment data, broader sentiment remains muted as investors await further clarity from policymakers.

US Economic Data Sends Mixed Signals

Wednesday’s data provided little conviction for traders looking for a breakout in dollar strength. The ADP Non-Farm Employment Change came in stronger than expected, showing 42,000 new jobs for October, compared to the forecast of 32,000. However, the report failed to generate lasting bullish sentiment, as other indicators painted a more cautious picture.

The ISM Services PMI climbed to 52.4, up from 50.0 in September, hinting at moderate growth in the services sector. Despite the improvement, traders were hesitant to push the greenback higher ahead of key speeches by Federal Reserve officials.

Attention Turns to the Bank of England

Thursday’s focus is on the Bank of England’s policy report and remarks from Governor Andrew Bailey. The BOE is widely expected to hold its Official Bank Rate at 4.00%, with the voting split projected at 0–3–6, indicating a cautiously optimistic outlook despite slow UK growth.

Markets are keenly listening for any hints of future tightening or dovish signals, as these could set the tone for GBP/USD’s next move. Meanwhile, remarks from Federal Reserve member Christopher Waller and upcoming US Consumer Sentiment data are expected to influence near-term direction for the dollar.

US Dollar Technical Outlook

The US Dollar Index (DXY) is currently testing the 23.6% Fibonacci retracement around 99.23 after failing to sustain momentum above 100.35. Immediate support levels are seen at 99.67, 99.46, and 99.25, while a drop below 99.25 could trigger a deeper decline toward 98.57 or even 98.09.

The 200-day exponential moving average at 98.88 serves as a critical support area, while the RSI at 55 reflects a cooling trend that limits upside potential unless buyers reclaim the 100.35–100.65 zone.

GBP/USD Forecast

The British pound is trading near $1.3064 after attempting to recover from earlier losses. Resistance lies at $1.3139, which aligns with a descending trendline and the 50-day EMA, while the 200-day EMA at $1.3313 remains a significant barrier.

Failure to break above $1.3140 could see a renewed slide toward $1.3010 and $1.2930. The RSI reading of 41 suggests weak momentum, indicating that bears may still control short-term direction unless a sustained breakout occurs.

EUR/USD Forecast

The euro trades around $1.1514, holding slightly above recent lows near $1.1470. However, EUR/USD remains confined within a descending channel, with the 50-day EMA at $1.1547 and 200-day EMA at $1.1622 acting as resistance levels.

A rejection from these points could push prices back toward $1.1440 and $1.1409. The RSI near 48 points to consolidation, suggesting limited strength until a decisive break above $1.1580–$1.1620 confirms a bullish reversal.

Outlook

The dollar’s performance this week hinges on the tone of central bank communications. With the Federal Reserve and Bank of England both addressing markets, traders will look for cues on future rate paths and inflation expectations. For now, the greenback remains trapped between mixed data and cautious optimism, with further volatility expected through the end of the week.

For more daily forecasts and in-depth analysis on major forex pairs like EUR/USD, and GBP/USD, visit our Forecasts section and stay ahead of market trends.