US Dollar Price Forecast: Fiscal Risks Weigh on DXY; EUR/USD and GBP/USD Test Key Resistance

Market impact: mildly bearish USD, but with strong technical limits on EUR/USD upside.

• The key macro shift is that investors are focusing on U.S. fiscal credibility and elevated long-term borrowing costs rather than only near-term economic data. That can weaken the dollar if markets conclude that persistent deficits and rising Treasury supply will require a higher risk premium or eventually constrain Federal Reserve easing flexibility. The reported 30-year Treasury yield near 5.337% reinforces the sensitivity of FX markets to the fiscal narrative.

• For EUR/USD, the fundamental backdrop remains relatively supportive because expectations of continued ECB vigilance contrast with concern over U.S. fiscal policy. However, the pair has twice struggled near 1.1700–1.1712, creating a potential double-top structure. This makes the immediate reaction mixed: dollar weakness supports the pair, but failure to clear resistance could trigger profit-taking and a corrective move toward the 1.1658–1.1640 support area. A sustained break above 1.1712 would be more significant than another intraday test because it would weaken the reversal signal and confirm renewed upside momentum.

• The article’s technical framework therefore favors range volatility rather than an unqualified EUR/USD breakout. Holding above approximately 1.1640–1.1658 would preserve the broader bullish structure cited by the source; a break below that zone would increase the risk that the dollar-negative fiscal theme is being outweighed by technical exhaustion or renewed rate differentials.

• GBP/USD provides a useful cross-market confirmation signal. Sterling is also supported by relative BoE tightening expectations, but the pair is testing a potential triple-top zone around 1.3656–1.3676 with an overbought RSI reading. If both EUR/USD and GBP/USD fail at resistance simultaneously, the immediate dollar downside case would likely lose momentum even if the longer-term fiscal concern remains intact.

• The most important near-term catalysts are the Fed Chair’s August 28, 2026 Jackson Hole speech and the July inflation release. A hawkish policy message or firmer-than-expected inflation could revive U.S. yield support and challenge EUR/USD’s downside supports; a dovish signal combined with continued fiscal concern would improve the probability of a resistance breakout in EUR/USD.

Overall assessment:

bearish for the dollar’s medium-term narrative, but only conditionally bullish for EUR/USD in the short term. The fiscal story is supportive of euro upside, yet the 1.1700–1.1712 ceiling is the market’s immediate test. Until that barrier is decisively overcome, pullback risk remains substantial and the signal should be treated as mixed rather than a confirmed directional breakout.