EUR/USD, GBP/USD, DXY Price Forecast: DXY at $104.85; US Inflation Ahead

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Updated: Jun 2, 2024, 10:22 GMT+00:00

Key Points:

US Core PPI rose by 0.5% month-over-month, surpassing the previous increase of 0.2%.
UK claimant count decreased to 8.9K, below the forecasted 13.9K.
US Core Consumer Price Index (CPI) for April is expected to increase by 0.3% month-over-month, down from the previous 0.4%.

EUR/USD, GBP/USD, DXY Price Forecast: DXY at $104.85; US Inflation Ahead

Market Overview

On Tuesday, the US Core Producer Price Index (PPI) rose by 0.5% month-over-month, surpassing the previous increase of 0.2% and defying the expectation of a 0.1% decline. The overall PPI also increased by 0.5%, exceeding the forecast of 0.3% and the previous reading of -0.1%.

In Europe, France reported its Final Consumer Price Index (CPI) for March, which remained steady at 0.5%, matching both the forecast and the previous month’s figure.

In the United Kingdom, labour market data revealed mixed results. The claimant count Change decreased to 8.9K, below the forecasted 13.9K and the previous -2.4K. Meanwhile, the Average Earnings Index for the past three months remained at 5.7%, aligning with expectations but higher than the previous 5.3%. The unemployment rate edged up to 4.3% from 4.2%, meeting the forecast.

Events Ahead

Looking ahead, the US Core Consumer Price Index (CPI) for April is expected to increase by 0.3% month-over-month, down from the previous 0.4%. Core Retail Sales are forecasted to rise by 0.2%, a significant drop from the prior 1.1%.

The overall CPI is projected to remain steady at 0.4% month-over-month, while the annual CPI is expected to ease slightly to 3.4% from 3.5%. The Empire State Manufacturing Index is anticipated to improve to -9.9 from -14.3, and Retail Sales are expected to grow by 0.4%, down from the previous 0.7%.

In Europe, the Flash Employment Change and Flash GDP for Q1 are both forecasted to rise by 0.3%, consistent with previous readings. Industrial Production is expected to grow by 0.5%, slightly down from the prior 0.8%. In the United Kingdom, a 10-year Bond Auction is scheduled, with the previous yield recorded at 4.37%.

US Dollar Index (DXY)

Dollar Index

The Dollar Index (DXY) is trading at $104.873, down 0.14% today. The 4-hour chart shows the pivot point at $105.067, which serves as a critical level for traders. Immediate resistance levels are at $105.475, $105.740, and $106.146, suggesting potential upward targets.

On the downside, immediate support is found at $104.679, followed by $104.200 and $103.886. Technical indicators highlight a bearish trend below the pivot point. The 50-day EMA is at $105.283, and the 200-day EMA is at $105.216. A break above $105.067 could signal a bullish shift while staying below this level supports a bearish outlook.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is trading at $1.08233, up 0.04%. The 4-hour chart highlights a pivot point at $1.08125, a key level for traders. Immediate resistance levels are at $1.08479, $1.08770, and $1.09107, suggesting potential upward targets. On the downside, immediate support is at $1.07806, followed by $1.07513 and $1.07240.

Technical indicators show a bullish trend above the pivot point. The 50-day EMA is at $1.07714, and the 200-day EMA is at $1.07554. A break below $1.08125 could signal a bearish shift, driving a sharp selling trend.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: TradingView

The GBP/USD is trading at $1.25949, up 0.02%. The 4-hour chart indicates a pivot point at $1.25811, a critical level for traders. Immediate resistance levels are at $1.26340, $1.26648, and $1.27077, signalling potential upward targets. On the downside, immediate support is at $1.25214, followed by $1.24659 and $1.24233.

Technical indicators suggest a bullish trend above the pivot point. The 50-day EMA is at $1.25378, and the 200-day EMA is at $1.25432. A break below $1.25811 could trigger a sharp selling trend.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.