EUR/USD, GBP/USD, DXY Forecast: DXY Steady Near 104.20; Focus on Jobless Claims

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Published: Jun 6, 2024, 07:57 GMT+00:00

Key Points:

German Factory Orders drop 0.2%, weighing on EUR/USD amid mixed US economic data.
US ADP Employment rises by 152K, below expectations, supporting the dollar’s resilience.
UK Construction PMI and Eurozone Retail Sales data expected to impact GBP/USD and EUR/USD.

EUR/USD, GBP/USD, DXY Forecast: DXY Steady Near 104.20; Focus on Jobless Claims

Market Overview

The EUR/USD pair faced downward pressure as German Factory Orders fell by 0.2%, missing expectations of a 0.6% increase. This decline suggests weakening industrial activity in Germany, impacting the euro’s strength. Meanwhile, the USD was bolstered by mixed economic data.

The ADP Non-Farm Employment Change showed an increase of 152K jobs, below the expected 173K but still indicative of labor market growth. The Final Services PMI held steady at 54.8, and the ISM Services PMI rose to 53.8, surpassing the forecast of 51.0. These figures reflect resilience in the US service sector, supporting the dollar.

GBP/USD saw limited movement as traders awaited key data. The dollar index remained strong, reflecting overall market confidence in the US economy’s stability amid these mixed signals.

Events Ahead

Today, the UK’s Construction PMI is expected at 52.5, down from the previous 53.0, potentially indicating slower construction activity and weighing on GBP/USD. The Eurozone Retail Sales are forecasted to decline by 0.2%, which could further pressure the euro.

Additionally, the European Parliamentary Elections and the French 10-year Bond Auction results will be closely watched. At 11:30, US Challenger Job Cuts data will provide insight into employment trends, followed by the ECB’s Monetary Policy Statement at 12:15, where the main refinancing rate is expected to remain at 4.25%.

US Unemployment Claims, Revised Nonfarm Productivity, Unit Labor Costs, Trade Balance, and Natural Gas Storage data will be released throughout the day.

US Dollar Index (DXY)

Dollar Index

The Dollar Index is trading at $104.206, showing a 0.14% decline on a four-hour chart timeframe. The pivot point is set at $104.038, a crucial indicator for potential price movements. Immediate resistance is at $104.340, followed by $104.529 and $104.763. Key support levels are at $103.887, $103.730, and $103.571.

The 50-day Exponential Moving Average (EMA) stands at $104.463, and the 200-day EMA is at $104.804, suggesting a potential bearish trend in the short term. In conclusion, the Dollar Index remains bullish above $104.038.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

EUR/USD is trading at $1.08806, marking a 0.16% increase on a four-hour chart timeframe. The pivot point is set at $1.08720, a key indicator for potential price movements. Immediate resistance is at $1.08956, followed by $1.09162 and $1.09323.

On the downside, immediate support is found at $1.08616, with further support at $1.08467 and $1.08282. The 50-day Exponential Moving Average (EMA) is at $1.08608, and the 200-day EMA is at $1.08176, suggesting a short-term bullish trend. In conclusion, EUR/USD is bullish above $1.08720.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

GBP/USD is trading at $1.27937, reflecting a 0.06% increase on a four-hour chart timeframe. The pivot point is set at $1.27895, acting as a crucial indicator for potential price movements. Immediate resistance is at $1.28183, followed by $1.28413 and $1.28661. Key support levels are at $1.27713, $1.27561, and $1.27416.

The 50-day Exponential Moving Average (EMA) stands at $1.27539, while the 200-day EMA is at $1.26638, suggesting a bullish trend in the short term. In conclusion, GBP/USD maintains a bullish stance above $1.27895.

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.

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