EUR/USD, GBP/USD, DXY Price Forecast: Dollar Index Up 0.13%, Watch $101.78 Pivot

Market Overview

On Monday, the Dollar Index (DXY) showed resilience following FOMC Member Waller’s speech and the release of the CB Leading Index, which declined more than expected to -0.6% from the previous -0.4%.

Despite this dip, the Dollar Index held steady, reflecting market caution ahead of more U.S. economic data. The EUR/USD pair remained stable, supported by a stronger-than-expected Eurozone Current Account surplus of €37.0B, slightly above the previous €36.7B.

However, GBP/USD faced some pressure as market participants anticipated upcoming U.S. data, leading to mixed trading.

Events Ahead

Looking ahead, key events include the release of the Eurozone Final CPI y/y, expected to stay at 2.6%, and Germany’s Buba Monthly Report.

In the U.S., remarks from FOMC Members Bostic and Barr could further influence the Dollar Index. The outlook for EUR/USD and GBP/USD will likely hinge on these updates, potentially driving volatility in both pairs.

US Dollar Index (DXY)

The Dollar Index (DXY) is currently trading at $101.913, up by 0.13%. The index has reached an oversold condition, suggesting a potential bullish recovery.

The pivot point to watch is $101.78, with immediate resistance levels at $102.13, $102.51, and $102.93.

On the downside, key support levels are at $101.57, $101.30, and $101.06. The 50-day Exponential Moving Average (EMA) stands at $102.65, and the 200-day EMA is at $103.65, both currently above the price, indicating a bearish trend.

The outlook turns bullish above $101.78, with a break below this level potentially leading to a sharp selling trend.

EUR/USD Technical Forecast

EUR/USD has entered the overbought zone, as indicated on the chart. The recent formation of a Doji followed by a bearish engulfing candle suggests that the bullish momentum may be weakening.

This pattern typically indicates that buyers are losing strength, and sellers might be ready to push the price lower.

The immediate pivot point is at $1.10738, with resistance levels at $1.11083, $1.11444, and $1.11723. Support can be found at $1.10476, $1.10262, and $1.09989.

Bearish below $1.10738. A break above this level could renew bullish momentum, but if it stays below, expect further downside correction.

GBP/USD Technical Forecast

GBP/USD has recently broken out of an upward channel, indicating a strong potential for the continuation of the bullish trend. The pivot point to watch is $1.2975, with immediate resistance levels at $1.3009, $1.3046, and $1.3089.

On the downside, key support levels are at $1.2939, $1.2901, and $1.2866. The 50-day Exponential Moving Average (EMA) is at $1.2866, while the 200-day EMA is at $1.2821, both supporting the bullish outlook.

Bullish above $1.2975. However, a break below this level could lead to a sharp selling trend.