US Dollar Forecast: UK Labor Data Boosts GBP – EUR/USD and GBP/USD Outlook

Dollar Index Steady; Key Economic Events

The Dollar Index (DXY) is hovering at $101.664, down slightly by 0.01%. Investor confidence data out of Europe came in worse than expected at -15.4, keeping pressure on the dollar.

Traders are now focusing on upcoming U.S. economic events, including the NFIB Small Business Index and speeches from two Federal Reserve officials.

With wholesale inventories and consumer credit data set for later, markets are watching closely for clues on the U.S. economy’s trajectory.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $101.664, down slightly by 0.01%. The price remains near its pivot point at $101.425, which is a key area to watch.

If the index holds above this level, the bullish trend could continue, with immediate resistance at $101.882, followed by $102.220 and $102.478.

However, if it dips below the pivot, support is seen at $101.139, with further levels at $100.858 and $100.528.

The 50-day EMA sits at $101.417, just under the current price, suggesting mild bullish pressure. The 200-day EMA at $102.233 provides a longer-term resistance zone. Keep an eye on $101.425—holding above it suggests strength, but a lower break could signal a downward shift.

GBP Holds Firm as UK Labor Data Surprises Markets

The British pound is holding steady after UK labor data came in better than expected. The unemployment rate remained stable at 4.1%, and the Claimant Count change was significantly lower at 23.7K, well below the forecast of 95.5K.

However, wage growth softened slightly, with the Average Earnings Index falling to 4.0% from the expected 4.1%. Overall, the data shows a resilient labor market, offering some support to the pound.

GBP/USD Technical Forecast

The GBP/USD trades at $1.30913, up 0.12% on the day, as it tests a key pivot point at $1.30913. The pair currently holds above its 200-day EMA at $1.30112, reinforcing bullish sentiment, while the 50-day EMA at $1.313 provides near-term resistance.

Immediate resistance levels to watch are $1.31317 and $1.31816, with further upside at $1.32369. On the downside, support lies at $1.30138, followed by $1.29745 and $1.29416. A break below these levels could trigger more bearish momentum.

For now, GBP/USD looks bullish above $1.30913, but any sustained move below this level could signal a shift towards a bearish trend.

Euro Struggles as Investor Confidence Falls

The euro took a hit after the Sentix Investor Confidence index dropped to -15.4, below the expected -12.4, signalling weaker sentiment in the Eurozone. German CPI data also remained flat at -0.1%, reflecting ongoing inflationary challenges.

Additionally, Italy’s industrial production saw a notable decline, falling by 0.9% compared to the 0.5% growth forecasted. This combination of weak data can add pressure on the euro. Since these events have not had a very high impact, we may not see much movement in EUR/USD.

EUR/USD Technical Forecast

The EUR/USD is trading at $1.10359, up by 0.03%, hovering around a critical pivot point at $1.10291. This level has shown strong support, reinforced by a triple bottom formation, suggesting buyers are stepping in. Immediate resistance lies at $1.10652, with further resistance levels at $1.10933 and $1.11356.

On the downside, watch for support at $1.10041, with additional cushions at $1.09786 and $1.09496. The 50-day EMA is above current prices at $1.10748, indicating some overhead resistance. Meanwhile, the 200-day EMA at $1.10161 provides a solid support base.

For now, the pair seems bullish above the $1.10291 pivot point, but any move below it could trigger a sharper selling trend.