EUR/USD, GBP/USD, DXY Price Forecast: DXY Surges to $103.24; Buy Now?

By:

Arslan Ali

Published: Aug 7, 2024, 07:37 GMT+00:00

Key Points:

EUR/USD remains bearish at $1.09103, below pivot point $1.09326, amid U.S. strength.
GBP/USD at $1.27110, poised for gains if UK data shows positive market trends.
Dollar Index up 0.36% to $103.241, driven by strong U.S. economic data expectations.

In this article:

EUR/USD

-0.42%

GBP/USD

-0.17%

Market Overview

Recent economic data from Europe and the UK has painted a mixed picture for their respective currencies. Germany’s industrial production rose by 1.4% in July, surpassing expectations of 1.0% and showing a recovery from June’s 3.1% decline.

However, the German trade balance showed a surplus of €20.4 billion, slightly below the forecast of €21.7 billion. Meanwhile, the French trade balance improved slightly to -€6.1 billion, beating expectations.

In the UK, the Halifax House Price Index increased by 0.8%, well above the anticipated 0.2%, signalling resilience in the housing market.

Events Ahead

Looking ahead, key U.S. data will likely influence currency markets. The U.S. is expected to report a decline of 1.6 million barrels in crude oil inventories, which could affect inflation expectations. The 10-year bond auction and consumer credit data will also be watched closely.

The GBP/USD is currently trading at $1.27110, with a potential upward move if the UK’s RICS House Price Balance shows less decline than anticipated. The EUR/USD, priced at $1.09103, remains under pressure amid stronger U.S. economic forecasts.

The Dollar Index, at $103.241, could continue its ascent if U.S. economic data exceeds expectations, reinforcing the dollar’s strength against the euro and the pound.

US Dollar Index (DXY)

Dollar Index Price Chart – Source: Tradingview

The Dollar Index is trading at $103.241, marking a 0.36% increase. The index is positioned just below the pivot point of $103.298, indicating cautious optimism in the market.

Immediate resistance is at $103.568, with further resistance levels at $103.960 and $104.450. Support levels are set at $102.710, $102.153, and $101.820. The 50-day EMA at $103.620 and the 200-day EMA at $104.363 suggest a bullish trend.

However, a break below $102.710 could trigger significant selling pressure.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is trading at $1.09103, down 0.14%, reflecting a bearish sentiment as it stays below the pivot point at $1.09326. Immediate resistance is at $1.09632, with additional resistance levels at $1.09983 and $1.10270.

Support is positioned at $1.08925, $1.08663, and $1.08185, suggesting potential areas of further decline. The 50-day EMA is at $1.08826, and the 200-day EMA is at $1.08433, indicating downward pressure.

The outlook remains bearish below $1.09326, and a break above this level could shift momentum to a bullish bias.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair is trading at $1.27110, up 0.19% in today’s session. The currency is hovering below the pivot point at $1.27326, indicating a cautious market sentiment. Immediate resistance lies at $1.27739, with further resistance at $1.28071 and $1.28413.

Support levels are established at $1.26718, $1.26416, and $1.26144. The 50-day EMA at $1.27915 and the 200-day EMA at $1.28091 suggest a bearish outlook.

The market remains bearish below $1.27326, but if prices rise above this level, it could shift to bullish momentum.

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.