EUR/USD, GBP/USD, DXY Price Forecast: DXY Breaks Downward Channel at $105

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Published: Jul 8, 2024, 07:50 GMT+00:00

Key Points:

US Non-Farm Employment rose by 206K in June, beating the forecasted 191K.
The Dollar Index (DXY) trades at $105.008, slightly down by 0.04%.
EUR/USD is trading at $1.08182, up 0.10%, with support at $1.08103.

EUR/USD, GBP/USD, DXY Price Forecast: DXY Breaks Downward Channel at $105

Market Overview

On Friday, the Non-Farm Employment Change report showed an increase of 206K jobs in June, surpassing the expected 191K but revised down from 218K in May. The Unemployment Rate ticked up to 4.1% from 4.0%, while Average Hourly Earnings growth was 0.3%, down from the previous 0.4%.

This data has stirred mixed reactions in the currency markets. The Dollar Index (DXY) is hovering around 105.008, down slightly by 0.04%, reflecting the market’s cautious sentiment. The EUR/USD pair is currently trading at $1.08182, slightly up by 0.10%.

The stronger-than-expected job growth in the US has provided some support for the dollar, but the increased unemployment rate and slowing wage growth are tempering enthusiasm.

Events Ahead

Looking ahead, Germany will release its Trade Balance figures, with a forecast of 24.9B, up from the previous 22.2B. This could provide support for the euro if the figures meet or exceed expectations. Additionally, the Sentix Investor Confidence index, expected at -0.6, will be closely monitored for signs of economic sentiment in the Eurozone.

In the UK, MPC Member Haskel’s speech will be scrutinized for any hints on future monetary policy. The BRC Retail Sales Monitor y/y, with a previous figure of 0.4%, will also be a significant indicator of retail health.

In the US, the Consumer Credit m/m report, expected to show a rise to 9.7B from 6.4B, will provide insights into consumer spending behaviour. These upcoming events will be critical in shaping the near-term direction of the EUR/USD, GBP/USD, and Dollar Index.

US Dollar Index (DXY)

Dollar Index Price Chart – Source: Tradingview

The Dollar Index is trading at $105.008, down 0.04%. On the 4-hour chart, the pivot point is $104.907. Immediate resistance is at $105.140, followed by $105.331 and $105.520. Key support levels are $104.774, $104.642, and $104.534.

The 50-day EMA is at $105.249, and the 200-day EMA is at $105.402, suggesting a bullish trend above $104.907. A break below this pivot could drive a sharp selling trend. Maintaining above $104.907 is critical for sustaining the bullish outlook.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is trading at $1.08182, up 0.10% on the 4-hour chart. The pivot point at $1.08305 is a critical level. Immediate resistance is at $1.08463, followed by $1.08747. Support levels are at $1.08103, $1.07986, and $1.07794.

Technical indicators show the 50-day EMA at $1.07940 and the 200-day EMA at $1.07605, indicating a bullish trend above $1.08103.

A break below this support could trigger a selling trend. Maintaining above $1.08103 is crucial to sustain the bullish outlook.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD is trading at $1.28071, showing no significant change. On the 4-hour chart, the pivot point is at $1.28177. Immediate resistance is at $1.28368, followed by $1.28565 and $1.28771.

Key support levels are at $1.27843, $1.27541, and $1.27323. The 50-day EMA is positioned at $1.27504, and the 200-day EMA is at $1.27071, indicating a bullish trend above $1.27843.

A break below this level could lead to a sharp selling trend. Maintaining above $1.27843 is crucial for sustaining the 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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