Market Overview
During the early European session, the GBP/USD was impacted by stronger-than-expected Retail Sales, which rose by 2.9%, well above the forecasted 1.6% and the previous -1.8%.
Additionally, the UK’s Public Sector Net Borrowing came in at £14.1B, slightly better than the expected £14.5B. These figures helped provide some support for the pound.
Meanwhile, in the Eurozone, several PMI reports were released. Germany’s Flash Manufacturing PMI fell to 43.4 from a previous 45.4, missing expectations of 46.4. Similarly, the French Flash Manufacturing PMI dropped to 45.3, below the forecast of 46.8.
However, Germany’s Flash Services PMI improved slightly to 53.5, from a previous 54.2, while the French Flash Services PMI slipped to 48.8. These mixed results have led to a cautious sentiment around the EUR/USD.
Events Ahead
Looking ahead, several critical economic indicators are expected to influence the markets. At 8:30, the UK’s Flash Manufacturing PMI and Flash Services PMI are anticipated, with forecasts at 51.3 and 53.0, respectively. These numbers will be closely watched to gauge the health of the UK economy.
Later in the day, the Eurozone will see the ECOFIN Meetings, potentially impacting the EUR/USD depending on the outcomes discussed. In the US, the Dollar Index will be influenced by the Flash Manufacturing PMI and Flash Services PMI, with expected values of 51.0 and 53.4, respectively.
Existing Home Sales and the CB Leading Index at 14:00 will further provide insights into the US economic landscape. With these upcoming data releases, traders should be prepared for potential volatility.
US Dollar Index (DXY)
The Dollar Index is trading at $105.800, up 0.13%. The pivot point is at $105.538. Immediate resistance levels are $105.816, $105.973, and $106.148. Support levels are $105.326, $105.159, and $105.031.
Technical indicators show the 50-day EMA at $105.273 and the 200-day EMA at $105.005, suggesting a bullish trend.
The outlook remains bullish above $105.538; a break below this level could trigger a significant selling trend.
EUR/USD Technical Forecast
EUR/USD is currently trading at $1.06993, down 0.03%. The pivot point is at $1.07116. Immediate resistance levels are at $1.07381, $1.07597, and $1.07817. Support levels are at $1.06865, $1.06678, and $1.06500.
Technical indicators show the 50-day EMA at $1.07447 and the 200-day EMA at $1.07854, suggesting bearish momentum.
The outlook remains bearish below $1.07116; a break above this level could shift momentum towards a bullish bias.
GBP/USD Technical Forecast
GBP/USD is trading at $1.26443, down 0.10%. The pivot point is $1.26854. Immediate resistance levels are $1.27154, $1.27393, and $1.27632. Support levels are $1.26456, $1.26146, and $1.25882.
Technical indicators show the 50-day EMA at $1.27100 and the 200-day EMA at $1.26917, suggesting a bearish trend. The outlook remains bearish below $1.26854; a break above this level could shift momentum toward a bullish bias.
For a look at all of today’s economic events, check out our economic calendar.
