EUR/USD, GBP/USD, DXY Price Forecast: DXY at $105 as NFP Looms

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Published: Jul 5, 2024, 07:56 GMT+00:00

Key Points:

Mixed Eurozone data: German industrial production down, French trade balance beats estimates.
UK housing market: Halifax HPI remains flat in June.
Focus shifts to US: Non-farm payrolls and Fed speeches in spotlight.

EUR/USD, GBP/USD, DXY Price Forecast: DXY at $105 as NFP Looms

Market Overview

The Eurozone saw mixed data this morning. German industrial production unexpectedly plunged by 2.5% in May, exceeding the forecasted 0.1% growth.

Similarly, French industrial production contracted by 0.6%, missing the expected 0.6% expansion. However, French trade balance data surprised positively, with a deficit of €7.2 billion, better than the anticipated €7.6 billion.

In the UK, the Halifax House Price Index remained stagnant in June, aligning with forecasts.

Events Ahead

Looking ahead, the US labor market will be in the spotlight, with the release of average hourly earnings and non-farm payroll data. Economists anticipate a 0.4% increase in average hourly earnings and the addition of 191,000 jobs in June. The unemployment rate is expected to hold steady at 4.0%.

Additionally, the Federal Reserve will release its semi-annual Monetary Policy Report, offering insights into the central bank’s thinking. Furthermore, speeches by Fed Governor Williams and ECB President Lagarde will be closely watched for any hints about future monetary policy decisions.

US Dollar Index (DXY)

Dollar Index Price Chart – Source: Tradingview

The U.S. Dollar Index (DXY) is currently trading at $105.003, reflecting a slight 0.12% decline. While the index remains above key support levels at $104.893, $104.774, and $104.642, it faces a crucial pivot point at $105.169.

A break below this pivot could trigger a bearish trend, while a successful hold above it might signal renewed bullish momentum with potential targets at $105.414, $105.597, and $105.816.

The 50-day and 200-day exponential moving averages (EMAs), positioned at $105.430 and $105.458, respectively, suggest a cautious outlook for the DXY in the near term.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair is showing a bullish bias, trading at $1.08228, a modest 0.10% increase. The pair finds itself above a crucial pivot point of $1.0810, suggesting potential for further upside movement.

Immediate resistance levels are located at $1.0832, $1.0846, and $1.0862, while support rests at $1.0789, $1.0773, and $1.0753. The 50-day and 200-day exponential moving averages (EMAs) are positioned below the current price, reinforcing the bullish sentiment.

However, traders should remain vigilant as a break below the $1.0810 pivot point could trigger a sharp reversal, potentially leading to a selling trend.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

he GBP/USD pair is exhibiting a bullish bias, currently trading at $1.27718, a slight 0.09% increase. The pair sits above a critical pivot point of $1.2753, indicating potential for further gains. Traders should monitor key resistance levels at $1.2788, $1.2807, and $1.2827.

Conversely, a break below the pivot point could trigger a downward reversal, potentially leading to a selling trend with support levels at $1.2734, $1.2714, and $1.2692. The 50-day and 200-day exponential moving averages (EMAs) at $1.2717 and $1.2695, respectively, further support the current bullish outlook.

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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