EUR/USD, GBP/USD, DXY Price Forecast: U.S. CPI Triggers Market Shift; What’s Next?

By:

Arslan Ali

Published: Mar 13, 2024, 07:48 GMT+00:00

Key Points:

Dollar Index uptick signals cautious market optimism, impacting EUR/USD and GBP/USD forecasts.
Key U.S. data releases on Thursday pivotal for shaping EUR/USD and GBP/USD price trajectories.
German bond auction and Eurozone industrial production to offer additional insights for currency pairs.

In this article:

EUR/USD

+0.08%

GBP/USD

-0.07%

EUR/USD and GBP/USD Price Forecast: Analysis and Events Ahead

The Dollar Index saw a modest increase to 102.98, up by 0.06%, reflecting a cautious optimism in the market. The U.S. CPI for February showed a 0.4% month-on-month increase, with a year-on-year rise to 3.2%, slightly exceeding expectations and keeping high-interest rate fears alive.

Events Ahead

The focus now turns to Thursday, with significant U.S. data releases on the horizon: Core PPI m/m expected at 0.2%, Core Retail Sales m/m projected at 0.5%, PPI m/m forecasted at 0.3%, Retail Sales m/m anticipated at 0.8%, and Unemployment Claims estimated at 218K. These figures are crucial for the Dollar’s trajectory and will directly impact the EUR/USD and GBP/USD pairs.

As investors analyze these currency pairs amidst evolving economic indicators, the forthcoming U.S. data, alongside German 10-year Bond Auction results and Industrial Production m/m figures for the Eurozone, are poised to offer fresh insights.

US Dollar Index (DXY)

Dollar Index

The Dollar Index, a measure of the U.S. dollar against a basket of major currencies, experienced a slight increase of 0.06%, reaching 102.98. Technical analysis indicates the index is currently positioned above its pivot point at 102.72, suggesting a bullish outlook.

Immediate resistance levels are observed at 103.13, 103.31, and 103.60, which could cap further gains. Conversely, support levels at 102.36, 102.10, and 101.91 provide a safety net against potential declines.

The 50-day and 200-day Exponential Moving Averages at 103.18 and 103.57, respectively, reinforce the bullish sentiment, yet a dip below the pivot could prompt a bearish shift.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair slightly decreased by 0.04%, marking the price at 1.09220. Trading above its pivot point at 1.09125, the currency pair shows a bullish potential. Resistance levels at 1.09449, 1.09803, and 1.10152 outline potential challenges for upward movement.

Support levels are set at 1.08723, 1.08443, and 1.07986, providing fallback points in case of declines.

The 50-day and 200-day Exponential Moving Averages, positioned at 1.08991 and 1.08536 respectively, underpin a bullish sentiment. However, a move below the pivot could signify a trend reversal, indicating the importance of the 1.09125 level for future direction.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair experienced a slight decrease of 0.08%, positioning it at 1.27837. Currently trading just below the pivot point of 1.27989, the pair is at a crucial juncture that could dictate its short-term direction.

Resistance levels identified at 1.28425, 1.28932, and 1.29382 indicate potential challenges for upward movements, while support levels at 1.27481, 1.27037, and 1.26704 provide buffers against further declines. The 50-day and 200-day Exponential Moving Averages, at 1.27605 and 1.26886 respectively, hint at a bearish sentiment below the pivot.

However, surpassing the pivot point could signal a shift towards a more bullish trend, emphasizing the importance of the 1.27989 threshold for future market dynamics.

For a look at all of today’s economic events, check out our economic calendar.

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.