Summary at a Glance
- Main Trend: Bearish USD outlook continues into November.
- Fed Policy: 0.25% rate cut on Oct 29; further easing possible.
- Top FX Pairs: EUR/USD, GBP/USD, USD/JPY, USD/INR.
- Risks to Watch: U.S. government shutdown, Fed uncertainty, Japan policy intervention.
USD Weekly Forecast: Still on the Defensive
The US dollar remains under pressure this week as rate cut expectations dominate the narrative. On October 29, the Federal Reserve cut rates by 25 basis points, reinforcing the greenback’s downtrend. While Fed Chair Powell suggested a pause in December, markets remain skeptical, with futures pricing in further easing.
Adding to USD’s woes:
- Government Shutdown: Now in its 5th week, leading to data blackouts.
- Soft Labor Market: Jobless claims rising, consumer sentiment falling.
- Yield Pressure: With U.S. yields capped and inflation moderating, rate differentials favor the euro and pound.
Key Drivers of Dollar Weakness
U.S. Government Shutdown Creates Data Vacuum
The prolonged shutdown means no key data releases like non-farm payrolls or retail sales. Analysts estimate it could shave 2% off Q4 GDP, eroding investor confidence in the dollar.
Weakening Economic Indicators
- Consumer Sentiment: Near multi-month lows.
- Labor Market: Weekly jobless claims ticking up.
- Business Outlook: PMI and ISM indexes flashing red.
Fed Rate Cuts Largely Priced In
Markets now price a ~85% chance of another rate cut in December, down from near-certainty earlier. Most analysts expect continued USD weakness into year-end.
Global Policy Divergence
- ECB & BoE: Paused hikes, inflation near targets.
- U.S: Inflation still sticky at 3–4%, but Fed is dovish.
- The rate gap now favors the euro and pound.
Weekly Currency Forecast: Major FX Pairs
EUR/USD – Bullish Momentum Continues
Forecast Range: 1.1700 – 1.2100
Resistance: 1.2000
Support: 1.1700
Bias: Bullish
The euro is strengthening as the ECB stays put while the Fed eases. If EUR/USD breaks 1.2000, we could see a year-end move toward 1.2200.
GBP/USD – Holding Gains, Budget in Focus
Forecast Range: 1.3200 – 1.3700
Resistance: 1.3660
Support: 1.3200
Bias: Cautiously Bullish
Sterling is benefiting from dollar weakness but faces headwinds from the upcoming Nov 26 Autumn Budget. BoE rate cuts may be on the table if UK inflation softens further.
USD/JPY – Close to Intervention Level
Forecast Range: ¥150.00 – ¥160.00
Resistance/Trigger: ¥160.00
Support: ¥150.00
Bias: Bearish USD / Bullish JPY
Japan’s central bank is expected to tolerate moderate yen depreciation, but ¥160 is widely viewed as a red line for intervention. Traders are watching closely.
USD/INR – Rupee Faces Pressure, RBI May Intervene
Forecast Range: ₹88.00 – ₹89.00
Resistance: ₹89.00
Support: ₹88.00
Bias: Bearish INR
The RBI is actively defending the rupee. However, trade deficits and USD strength are keeping USD/INR elevated. Look for intervention around ₹88.80.
DXY – Dollar Index in Downtrend
Current Level: ~99.0
Resistance: 100.00
Support: 98.00
Bias: Bearish
Unless a major safe-haven event occurs, DXY is likely to test support near 98.00 in the coming week.
Key Events to Watch (Nov 3 – Nov 10)
| Date | Event | Importance |
|---|---|---|
| Nov 4 | RBA Rate Decision | Medium |
| Nov 5 | China Caixin/PMI (Nov) | Medium |
| Nov 6 | US ISM Manufacturing (Oct) | Medium |
| Nov 7 | US Nonfarm Payrolls | High |
Quick Technical Summary
| Pair | Bias | Support | Resistance | Key Driver |
|---|---|---|---|---|
| EUR/USD | Mildly Bullish | 1.1700 | 1.2000 | ECB-Fed rate differential |
| GBP/USD | Cautiously Bullish | 1.3200 | 1.3660 | UK fiscal policy & BoE |
| USD/JPY | Bearish USD / Bullish JPY | ¥150.00 | ¥160.00 | BOJ policy, possible intervention |
| USD/INR | Bearish INR | ₹88.00 | ₹89.00 | RBI action, trade flows |
| DXY | Bearish | 98.00 | 100.00 | Fed policy, sentiment |
FAQs – Dollar Forecast Insights
Will the dollar strengthen next week?
Unlikely. The market has priced in most Fed easing. Without a shock event, USD is expected to stay weak.
What’s the USD forecast this week?
The short-term forecast is bearish. Fed dovishness and limited data will likely keep USD on the back foot.
Can EUR/USD reach 1.20?
Yes. If the Fed maintains its dovish tone and the ECB stays steady, EUR/USD could break 1.20.
Is GBP/USD heading toward 1.38?
Not immediately. GBP needs a positive fiscal surprise or deeper USD weakness to rise above 1.37.
Will Japan intervene if the yen weakens more?
Possibly. ¥160 is seen as Tokyo’s intervention trigger. If breached, expect sharp yen strengthening.
Final Thoughts
The dollar’s bearish bias is set to persist this week. With Fed easing, political risks, and diverging global policies, pound to euro forecasts this week remain firmly tilted toward further GBP and EUR strength. Traders should watch technical resistance levels closely and prepare for volatility around central bank communications.
