**US Dollar Price Action Setups Into 2026: EUR/USD, GBP/USD, and USD/JPY Analysis**
*By James Stanley, originally published on Forex.com*
The United States Dollar (USD) is entering a critical phase in its longer-term trajectory, influenced by several economic variables including central bank policy shifts, inflation trends, global risk sentiment, and geopolitical uncertainty. As 2026 approaches, traders are attempting to decipher how the dollar’s performance will evolve against the backdrop of changing Federal Reserve policies and changing trends in global currencies. This detailed analysis explores the technical setup of major USD pairs: EUR/USD, GBP/USD, and USD/JPY.
## Key Themes Impacting USD Price Action
To better understand the outlook for the US Dollar into 2026, several macroeconomic and technical factors need to be monitored:
– **Federal Reserve Policy Path**: With inflation gradually retreating from its 2022 peak and the Fed having reached a potential plateau in interest rates, market participants are anticipating future rate cuts that could impact the dollar’s outlook.
– **Global Economic Sentiment**: Risk appetite is improving, reversing the exaggerated strength the dollar experienced during times of stress such as the pandemic and geopolitical conflict.
– **Yield Differentials**: The relative attractiveness of US Treasury yields compared with those of other major economies will continue to influence capital flow and USD strength.
– **Technical Setups**: Long-term patterns suggest turning points in various USD pairs, which may present strategic trading opportunities.
Now let’s examine how these themes express themselves in each of the three key currency pairs: EUR/USD, GBP/USD, and USD/JPY.
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## EUR/USD: Reclaiming Long-Term Resistance into 2026
The euro has been slowly regaining strength against the US dollar following a major sell-off from 2021 through 2022. That downtrend was largely a result of aggressive Fed tightening and slower policy responses from the European Central Bank (ECB). However, since Q4 2022, the pair appears to have formed a solid base.
### Technical Overview
– **Long-Term Range Support Held at 1.0340**: This level has provided vital structure, most notably in 2017 and again in 2022, when the pair briefly dipped below parity before staging a convincing recovery.
– **Reclaiming the 1.1000 Handle**: The resistance area around 1.1000 to 1.1200 has served as a barrier multiple times but is now back in play amidst shifting USD sentiment.
### Technical Indicators Suggest
– A longer-term reversal forming off multi-year support.
– Higher lows since late 2022, reinforcing a bullish trendline.
– Monthly RSI divergence hints at fading downside momentum.
### Into 2026
If the Federal Reserve begins to lower rates in late 2024 or early 2025, while the ECB maintains a tighter stance due to persistent eurozone inflation, EUR/USD could break decisively above the 1.1000–1.1200 zone.
**Outlook for EUR/USD Into 2026**:
– Bullish bias returning, contingent on central bank divergence.
– Potential upside targets include:
– 1.1500 as a medium-term objective.
– 1.1800–1.2000 for longer-term scenarios, barring major economic shocks.
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## GBP/USD: Resolving from a Decade-Long Contraction
The British pound’s journey since the Brexit vote has been riddled with volatility, but signs of long-term consolidation may be giving way to upward momentum. GBP/USD is now showing strong technical positioning as the pair breaks from a multi-year range.
### Technical Landscape
– **Support Held at 1.2000**: This round psychological level has provided a key anchor, most recently in Q4 2022.
– **Trendline Break from 2014 Highs**: A descending resistance line from over a decade ago is
Explore this further here: USD/JPY trading.