Markets will be closely watching the Eurozone Trade Balance data at 9:00 AM, expected at €13.3B. In the U.S., Building Permits and Housing Starts data are set for release, with forecasts of 1.43M and 1.34M, respectively.
Additionally, the University of Michigan’s Consumer Sentiment Index, expected at 66.7, could sway market sentiment, particularly for the Dollar Index.
GBP/USD traders will be eyeing the CB Leading Index at 13:30 for further clues on the U.K.’s economic outlook.
The Dollar Index (DXY) is currently trading at $102.911, down 0.06% on the day. The index has recently retraced to the 38.2% Fibonacci level at $103.039, where a bearish engulfing candle has formed on the 4-hour chart.
This suggests the potential for further downside correction. Both the 50-day and 200-day EMAs, positioned at $103.027 and $103.872 respectively, indicate bearish momentum.
Immediate support is at $102.708, with further downside targets at $102.452 and $102.166. The key level to watch is $103.039—if the index breaks below this, expect a deeper decline toward $102.70. Bearish below $103.039; a break above could shift the momentum back to bullish.
EUR/USD is trading at $1.09854, up 0.04% on the day, showing a bullish trend on the 4-hour chart. The pair is supported by an upward trendline and is currently holding above the pivot point at $1.09684.
The 50-day EMA at $1.09497 and the 200-day EMA at $1.08815 are reinforcing the bullish outlook. Immediate resistance is at $1.10060, with further resistance at $1.10481 and $1.10830.
The recent bullish candle formation supports the potential for further upside. A break below $1.09684 could shift momentum toward a bearish trend. Bullish above $1.09684, but a break below could lead to a sharp sell-off.
Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.
