US Dollar Forecast: CPI Weakens USD, PPI & Jobless Claims in Focus – GBP/USD & EUR/USD Outlook

Market Overview

The US Dollar Index (DXY) hovered near 103.50 as traders assessed the latest US Consumer Price Index (CPI) report. The data showed inflation slowing more than expected in February, fueling speculation that the Federal Reserve could consider rate cuts earlier than anticipated.

The February CPI report showed headline inflation rising 0.2% month-over-month, down from January’s 0.5%, while core inflation eased to 0.2%, slightly below the forecasted 0.3%.

On an annual basis, headline CPI declined to 2.8% from 3.0%, and core CPI dropped to 3.1% from 3.3%. The data reinforced expectations of a policy shift toward monetary easing, though Fed officials remain measured in their outlook.

Despite inflation cooling, the Federal Reserve has signaled no immediate changes to policy. Fed Chair Jerome Powell noted that rate cuts are not urgent given ongoing economic uncertainties.

San Francisco Fed President Mary Daly added that while slowing business activity is a factor, it is not yet enough to justify immediate adjustments. This cautious approach has tempered expectations for aggressive rate reductions.

Key Economic Events to Watch on March 13

Traders are closely watching key US economic data scheduled for release on Thursday, March 13, which could impact market sentiment and the Federal Reserve’s policy outlook.

The Producer Price Index (PPI) and Core PPI are expected to show 0.3% monthly growth, with a slight slowdown from the previous 0.4% PPI reading.

Additionally, weekly unemployment claims are forecast at 226K, up from 221K last week, signaling potential shifts in the labor market and broader economic trends.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading around $103.61, holding just above its pivot point at $103.23. The index remains in a cautious uptrend, but resistance at $104.28 will be the key hurdle for further gains. A breakout above this level could push DXY toward $104.92, reinforcing bullish momentum.

On the downside, immediate support stands at $102.71, and a break below this could trigger further selling toward $102.27. The 50-day EMA at $104.41 suggests near-term resistance, while the 200-day EMA at $106.21 signals long-term pressure.

For now, DXY remains bullish above $103.23, but traders should watch for a decisive move beyond resistance to confirm strength.

GBP/USD Technical Analysis

GBP/USD is hovering around $1.29528, holding just above its pivot point at $1.29431. The pair remains in a bullish zone, but momentum is fragile, with buyers needing a strong push above $1.29884 to sustain gains. A breakout past this level could open the door toward $1.30344, reinforcing upside potential.

On the downside, immediate support sits at $1.29058, and a break below this could trigger further selling toward $1.28605.

Technical indicators lean bullish, with the 50-day EMA at $1.28622, offering near-term support, while the 200-day EMA at $1.26636 suggests a long-term base. For now, GBP/USD stays bullish above $1.29431, with traders watching for a sustained breakout.

EUR/USD Technical Forecast

EUR/USD is slipping slightly, trading at $1.08783, as the pair struggles to gain momentum amid mixed economic signals. The pivot point at $1.09310 remains a key level—staying below it suggests further downside, while a breakout could shift momentum in favor of buyers.

Technical indicators point to weakness, with the 50-day EMA at $1.07755 providing near-term support, while the 200-day EMA at $1.05632 remains a longer-term safety net.

Immediate support sits at $1.08082, and a break lower could expose $1.07152, reinforcing a bearish outlook. Resistance looms at $1.10082, with a sustained move above this mark needed to challenge $1.10866. For now, EUR/USD remains bearish below $1.09310, with traders eyeing support zones for potential rebounds.