US Dollar Forecast: European PMI Figures in Focus; Gold, GBP/USD and EUR/USD Outlook

US Dollar Strengthens, Gold Eyes Fed Rate Signal

The US Dollar held firm as import prices rose 0.1%, beating forecasts of -0.2%, signaling resilience despite slowing economic activity. Meanwhile, gold remains steady as investors await Monday’s data, including the Empire State Manufacturing Index and PMIs.

Weakening manufacturing PMI forecasts at 49.4 highlight concerns about economic momentum, while services PMI at 55.7 suggests underlying stability. Gold prices could shift sharply depending on the strength of the dollar and upcoming Federal Reserve policy signals.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $106.847, down 0.09%, as it consolidates below the $107.185 pivot point. Despite the minor decline, the 4-hour chart shows the index holding above the 50 EMA at $106.703, suggesting a potential rebound if buyers maintain control.

Immediate support lies at $106.491, with deeper levels at $106.042, where the 200 EMA at $106.347 could offer further stability. On the upside, resistance is noted at $107.610, with a breakout paving the way for a test of $108.073.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,653.26, up 0.17%, as buyers maintain momentum above the $2,645.22 pivot point. Support holds at $2,623.73, with further downside at $2,605.19 if pressure increases.

Immediate resistance sits at $2,672.71, with targets at $2,693.50. The 50 EMA at $2,674.15 remains a key barrier, while the 200 EMA at $2,662.07 signals stability.

A sustained hold above the pivot supports further gains amid geopolitical concerns and cautious market sentiment.

Sterling Faces Pressure as GDP and Trade Data Disappoint

Sterling saw downward pressure after mixed UK economic data. GDP fell by 0.1%, missing forecasts of 0.1%, while industrial and manufacturing production both contracted at -0.6%, underscoring persistent weakness. The Goods Trade Balance widened to £19.0B, highlighting trade challenges.

Consumer inflation expectations ticked up to 3.0%, reflecting lingering price concerns.

Looking ahead, Monday’s data will be pivotal. Flash Manufacturing PMI is expected to remain below 50 at 48.4, signaling contraction, while Services PMI holds at 50.9, teetering on expansion. Sterling remains vulnerable amid weak economic indicators and mounting inflationary pressure, with markets watching closely for policy signals.

GBP/USD Technical Analysis

The GBP/USD is trading at $1.26396, up 0.24%, as it gains strength near the pivotal $1.26663 level, supported by an upward trendline on the 4-hour chart. This level is crucial for maintaining the bullish momentum, with immediate resistance at $1.27194 and a stronger hurdle at $1.27966.

On the downside, support is observed at $1.26046, followed by $1.25255, offering a safety net for the pair.

The 50 EMA at $1.26884 and the 200 EMA at $1.27083 highlight a mixed sentiment, with sellers likely to challenge gains near resistance levels. For now, the bullish trend remains intact, but a break below $1.26663 could invite sharp selling pressure, pushing prices toward lower supports.

Euro Outlook: German Trade Data Disappoints, PMIs Ahead

The euro faced pressure following disappointing German trade balance data, which fell to €13.4B against a forecast of €15.7B. Weakness in wholesale prices (0.0%) and stagnant French CPI (-0.1%) underscored economic challenges.

Looking ahead, Monday’s key flash PMIs will shape sentiment. French Manufacturing PMI is expected at 43.2, signaling contraction, while Services PMI holds steady at 46.9. German PMIs are marginally better but still sluggish, with Services forecasted at 49.5.

ECB President Lagarde’s speeches will be closely monitored for policy signals, especially as inflation and growth concerns persist in the eurozone. The euro remains vulnerable to further downside.

EUR/USD Technical Forecast

 

The EUR/USD is trading at $1.05167, showing a modest 0.18% increase as it breaks out of a downward channel on the 4-hour chart. This breakout suggests a potential shift toward a bullish trend, with immediate resistance at $1.05473 and a stronger level at $1.05914. The price is hovering just above the pivot point at $1.05062, signaling buyers are in control for now.

Support remains at $1.04829, followed by $1.04533, which aligns with recent lows. The 50 EMA at $1.05059 reinforces near-term bullish momentum, while the 200 EMA at $1.05386 could act as a short-term resistance hurdle.

A sustained move above $1.05062 is critical to maintain the upward trend, with buyers eyeing the next resistance levels.