US Dollar Forecast: DXY Firm, Unemployment Strength, Nagel Speech Awaited

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Updated: Feb 9, 2024, 08:57 GMT+00:00

US Dollar's resilience shines, with unemployment claims underscoring economic strength amidst global market fluctuations. German Buba President Nagel's speech ahead.

Highlights

US Dollar shows slight bearish trend; resilience in US economy reflected by recent unemployment claims.
Italian Industrial Production and German Buba President Nagel’s speech set to impact EUR/USD direction.
GBP/USD observes slight uptick, with RICS House Price Balance offering less negative outlook than expected.

EUR/USD and GBP/USD Price Forecast: Navigating Through Economic Indicators

As the US Dollar hovers around 104.100, showing a slight bearish trend with a nearly -0.01% change. The US economy showed resilience with Unemployment Claims at 218K against a forecast of 221K and Final Wholesale Inventories maintaining a steady 0.4%.

Mortgage Delinquencies saw a slight increase to 3.88%, while Natural Gas Storage reported a draw of -75B, indicating a shift in energy consumption patterns. The 30-y Bond Auction yielded 4.36|2.4, reflecting investor sentiment towards long-term US debt.

Events Ahead

In the Eurozone, focus shifts towards the Italian Industrial Production m/m, expected at 0.8% after a previous -1.5%, and remarks from German Buba President Nagel. His speech at a German Embassy event in Paris could provide insights into the ECB’s monetary policy outlook.

Meanwhile, the GBP/USD pair eyes the RICS House Price Balance, which showed a less negative outlook than anticipated at -18% against a forecast of -22%.

This data, coupled with upcoming Eurozone indicators, will likely influence both currency pairs’ short-term trajectories as traders assess the broader economic landscape and policy directions.

US Dollar Index (DXY)

Dollar Index

The Dollar Index is positioned just above the pivot point at 103.956, the index encounters resistance at 104.211, 104.600, and 104.853, suggesting potential ceilings for further gains.

Conversely, supports are set at 103.761, 103.563, and 103.321, which could stabilize declines. The Dollar Index hovers above the 50-Day EMA of 103.920 and the 200-Day EMA of 103.375, indicating a bullish undertone as long as it remains above the pivot.

This technical setup points to a cautiously optimistic outlook for the dollar, pending its ability to sustain above key thresholds.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

EUR/USD remains static at 1.07778, showcasing no change in the recent trading session. The currency pair encounters a pivotal moment at the 1.07892 mark, which serves as today’s balance point. Resistance levels are staged at 1.08097, 1.08297, and 1.08648, potentially capping upward moves.

Conversely, support is found at 1.07640, with further cushions at 1.07430 and 1.07241 to mitigate declines. The 50-Day and 200-Day Exponential Moving Averages at 1.07924 and 1.08555, respectively, suggest a tilt towards bearish sentiment if the pair remains below the pivot. The overall technical outlook points to caution, with a bearish bias under the pivot.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

GBP/USD edges up modestly to 1.26281, marking a 0.09% increase as it approaches the critical pivot point at 1.26444. Resistance levels are identified at 1.26743, 1.27180, and 1.27710, which could restrict further advances.

Support is established at 1.26144, with additional levels at 1.25772 and 1.25171, potentially providing a buffer against declines. The currency pair hovers near the 50-Day EMA at 1.26354 and the 200-Day EMA at 1.26575, suggesting a narrowly mixed sentiment.

The technical outlook implies a bearish bias if GBP/USD remains below the pivotal mark, indicating cautious trading dynamics ahead.

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.