EUR/USD and GBP/USD Price Forecast: Euro and Pound Rise on Data and BOE, Dollar Awaits CPI and Jobless Claims

Highlights

• Euro and pound strengthened against the dollar on positive economic data, while euro’s gains were tempered by a weak German bond auction.
• The pound found support in the Bank of England’s financial stability report but also raised concerns about market finance instability.
• The dollar remained stable ahead of US inflation and unemployment data, influenced by SEC’s approval of bitcoin ETFs.

Mixed Signals from Economic Data and BOE Comments

On Wednesday, both the euro and the pound exhibited strength against the dollar, fueled by a mix of factors. Positive economic data from the eurozone, particularly robust industrial production figures from France and Italy for November, bolstered the euro, which closed at 1.0972, marking a 0.38% gain.

However, the euro’s ascent was tempered by a lackluster German bond auction, underscoring subdued demand for the debt of the eurozone’s largest economy.

The pound found support in the Bank of England’s financial stability report, which downplayed concerns surrounding mounting household and corporate debt and indicated a limited impact from the quantitative tightening program on the bond market. The pound closed at 1.2741, rising by 0.26%.

The dollar was additionally influenced by the SEC’s approval of 11 spot bitcoin ETFs, which spurred demand for cryptocurrencies and somewhat reduced the dollar’s appeal as a safe-haven asset.

Events Ahead

Looking ahead, the euro could see volatility on Thursday with the release of the ECB’s economic bulletin and Italian industrial production data.  For the dollar, movement is expected as the US releases core and headline CPI data, reflecting rising inflation pressures, along with unemployment claims data, likely showing a slight decrease in claims for the week ending January 8.

US Dollar Index (DXY)

A day before, the US dollar index experienced relative stability and closed at 101.97, down by 0.16%. All eyes are on upcoming US inflation and unemployment data, expected to reveal moderate increases in consumer prices and a slight dip in jobless claims.

EUR/USD Technical Forecast

The EUR/USD pair witnessed a modest uptick on January 11, with the current price at 1.09797, marking a slight gain of +0.06% over the past 24 hours. Trading within a 4-hour timeframe, the key price levels to watch include the pivot point (green line) at 1.09695 and immediate resistance at 1.10160, followed by 1.10805 and 1.11367. Immediate support levels stand at 1.08983, 1.08282, and 1.07550.

In terms of technical indicators, the Relative Strength Index (RSI) currently stands at 58, indicating a balanced sentiment. The 50-Day Exponential Moving Average (50 EMA) is at 1.09616. This suggests a short-term bullish trend as the price is above the 50 EMA.

Chart analysis reveals that the EUR/USD pair violated a double top at 1.096, signaling a buying opportunity. In conclusion, the overall trend is bullish above $1.096, with a short-term forecast expecting the asset to test the resistance at $1.10160 in the coming days.

GBP/USD Technical Forecast

On January 11, the GBP/USD pair exhibited a modest increase, with the current price at 1.27653, marking a gain of +0.18% over the past 24 hours. Analyzing the 4-hour chart timeframe, key price levels come into focus, including the pivot point (green line) at 1.27253, immediate resistance at 1.27766, followed by 1.28272 and 1.28767. Immediate support levels stand at 1.26715, 1.26150, and 1.25484.

Turning to technical indicators, the Relative Strength Index (RSI) currently stands at 62, reflecting a balanced sentiment. The 50-Day Exponential Moving Average (50 EMA) is positioned at 1.27139, indicating a short-term bullish trend as the price remains above it.

Chart analysis reveals that GBP/USD has violated a symmetrical triangle pattern, suggesting a solid bullish trend continuation. In conclusion, the overall trend is bullish above $1.27253, with a short-term forecast anticipating a test of the resistance at $1.27766 in the coming days.