EUR/USD, GBP/USD, DXY Forecast: Dollar Index Up Over 0.10%; What’s Next?

By:

Arslan Ali

Updated: Jun 2, 2024, 10:21 GMT+00:00

Key Points:

Mixed U.S. economic data leads to a slight rise in the Dollar Index to $104.636, up 0.11%.
Unemployment claims increased to 222K, higher than the expected 219K, suggesting labor market softening.
Building permits fell to 1.44 million from 1.49 million, indicating slower future construction activity.

In this article:

EUR/USD

-0.42%

GBP/USD

-0.18%

Market Overview

Recent U.S. economic data has shown mixed results. Unemployment claims rose to 222K, above the expected 219K, suggesting a slight weakening in the labor market. Building permits dropped to 1.44 million, down from 1.49 million, indicating a slowdown in future construction activity. The Philly Fed Manufacturing Index fell sharply to 4.5, missing the forecast of 7.7 and the previous 15.5, pointing to a slowdown in manufacturing.

These mixed signals have resulted in a slight uptick in the Dollar Index, which is trading at $104.636, up 0.11%.

Events Ahead

Looking ahead, key events include the CB Leading Index and speeches from FOMC members Waller and Daly. The CB Leading Index is forecasted to remain unchanged at -0.3%. Waller’s speech at 4:15 pm and Daly’s at 6:15 pm will be closely monitored for insights into future monetary policy.

In Europe, the Final Core CPI and Final CPI are expected to remain steady at 2.7% and 2.4%, respectively. In the UK, MPC Member Mann’s speech at 10:00 am will be significant for GBP/USD traders. Her comments on inflation and interest rates will provide direction for the currency pair.

US Dollar Index (DXY)

Dollar Index

The Dollar Index is trading at $104.636, up 0.11% today. On the 4-hour chart, the pivot point is $104.597, serving as a crucial support level. Immediate resistance is at $104.763, followed by $104.920 and $105.146.

On the downside, immediate support is at $104.404, with further support at $104.072 and $103.792. Technical indicators show the 50-day EMA at $104.985 and the 200-day EMA at $105.134, suggesting a bearish trend.

The outlook remains bearish below $104.763, with a break above this level potentially boosting bullish momentum.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

EUR/USD is trading at $1.08559, down 0.08% on the day. The 4-hour chart highlights key levels, with the pivot point at $1.08644 serving as a crucial support level. Immediate resistance is found at $1.08950, followed by $1.09195 and $1.09430.

On the downside, immediate support is at $1.08313, with further support at $1.08161 and $1.07945. Technical indicators show the 50-day EMA at $1.08069 and the 200-day EMA at $1.07675, suggesting a bullish trend.

A formation of a doji candle above the pivot point level of $1.08644 is likely to drive a buying trend. However, a break below this level could trigger a sharp selling trend.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: TradingView

GBP/USD is trading at $1.26544, down 0.08% for the day. On the 4-hour chart, the pivot point is $1.26552, serving as a critical support level. Immediate resistance is at $1.26999, followed by $1.27349 and $1.27646.

On the downside, immediate support is at $1.26277, with further support at $1.25821 and $1.25507. Technical indicators show the 50-day EMA at $1.25882 and the 200-day EMA at $1.25576, indicating a bullish trend.

The market remains bullish above $1.26277, but a break below this level could drive 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 is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.