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EUR/USD, GBP/USD, DXY Price Forecast: DXY Holds $104; Expect a Rebound?
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Key Points:
- Eurozone inflation at 2.9% pressures ECB policy as U.S. data shows mixed signals.
- U.S. job growth slows; pending home sales surge 4.8%, boosting market confidence.
- Dollar Index slips to $104.179 amid uncertainty, impacting EUR/USD and GBP/USD.
In this article:
The Eurozone’s Core CPI Flash Estimate met expectations at 2.9%, while the CPI Flash Estimate slightly beat forecasts at 2.6%, suggesting persistent inflationary pressures that could influence the European Central Bank’s future policy. Meanwhile, U.S. economic data showed mixed signals.
The ADP Non-Farm Employment Change came in at a disappointing 122K, well below the expected 147K, indicating a slowdown in job creation. However, pending home sales surged by 4.8%, far exceeding the forecasted 1.4%, reflecting resilience in the housing market.
Despite this, the Dollar Index has slipped to $104.179, down 0.02%, reflecting investor uncertainty.
Events Ahead
Looking ahead, the market is closely watching the Bank of England’s (BOE) Monetary Policy Report and interest rate decision. The BOE is expected to raise rates from 5.00% to 5.25%, potentially boosting the GBP/USD, which currently sits at $1.28104. However, GBP could face volatility, especially if BOE Governor Bailey’s remarks or the MPC’s vote distribution indicate hesitancy in further rate hikes.
Across the Atlantic, U.S. unemployment claims and PMI data could further impact the Dollar Index and EUR/USD. A weaker-than-expected ISM Manufacturing PMI could reinforce the Federal Reserve’s dovish stance, maintaining downward pressure on the dollar and supporting the EUR/USD.
The outlook remains bullish above $103.953, but a break below this level could trigger significant selling pressure.
EUR/USD Technical Forecast
The EUR/USD pair is currently priced at $1.08140, showing a slight increase of 0.02%. On the 4-hour chart, the pivot point is set at $1.08328, marking a critical level for traders. Immediate resistance is at $1.08706, with further resistance at $1.08961 and $1.09216.
Support levels are at $1.08014, $1.07797, and $1.07529. The 50-day Exponential Moving Average (EMA) is at $1.08416, slightly above the 200-day EMA at $1.08280, indicating a potential bearish trend.
The outlook remains bearish below the pivot point, but a break above $1.08328 could signal a shift to bullish sentiment.
GBP/USD Technical Forecast
About the Author
Arslan Aliauthor
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.
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