US Dollar Forecast: Eyes on Flash PMI and Trump Speech; GBP/USD and EUR/USD Outlook

Market Overview

The US Dollar Index (DXY) slipped to $106.48 on Friday, weighed down by renewed trade optimism and mixed economic data. President Donald Trump’s indication of progress on a trade deal with China eased tariff concerns, reducing demand for the safe-haven dollar.

However, this optimism was tempered by disappointing US jobless claims data. Initial Jobless Claims rose to 219,000, missing the forecast of 215,000, while Continuing Jobless Claims slightly decreased to 1.869 million, highlighting ongoing labor market challenges.

Further dampening sentiment, the Philadelphia Fed Manufacturing Survey dropped to 18.1, below the expected 20, signaling a slowdown in economic activity. Conflicting statements from Federal Reserve officials added to the uncertainty, keeping traders cautious.

Looking ahead, market participants are focused on upcoming economic events that could influence the dollar’s trajectory. President Trump’s upcoming speech may impact trade sentiment, while the release of Flash Manufacturing PMI and Flash Services PMI will offer fresh insights into economic activity.

Additionally, Existing Home Sales and Revised UoM Consumer Sentiment will be closely monitored for further clues on economic strength. With geopolitical developments, economic data, and Fed commentary all in play, the dollar is expected to remain volatile in the sessions ahead.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $106.48, holding steady with no significant change. Currently, it’s just below the pivotal level at $106.56, which is crucial for setting the tone in the coming sessions.

If the DXY breaks above this pivot point, it could gain bullish momentum, targeting the immediate resistance at $107.03 and possibly climbing to the next level at $107.55.

However, staying below $106.56 keeps the outlook bearish, with support at $106.03 and further downside potential to $105.43. The 50 EMA at $107.13 acts as dynamic resistance, reinforcing the bearish bias. Watch the $106.56 level closely—it’s the key to the next move.

GBP/USD Technical Analysis

GBP/USD is trading at $1.26606, down slightly by 0.01%. Despite the minor dip, the pair remains above the crucial pivot point at $1.26398, keeping the bullish outlook intact. As long as prices stay above this level, GBP/USD is likely to target the immediate resistance at $1.27278, with the next upward target at $1.27978.

However, if the price breaks below the pivot point, it could trigger selling pressure, pushing the pair down to the first support at $1.25639 or even lower to $1.24912. The 50 EMA at $1.25623 supports the bullish sentiment, suggesting continued buying interest as long as prices remain above this dynamic support level.

EUR/USD Technical Forecast

EUR/USD is trading at $1.04968, showing a modest gain of 0.01%. The pair is holding above the crucial pivot point at $1.04669, which supports a cautiously bullish outlook. This level is essential because it has consistently acted as a floor, keeping buyers in control.

If prices stay above this pivot, EUR/USD could target the immediate resistance at $1.05342, with a potential move towards the next level at $1.05860.

However, a break below $1.04669 could shift momentum to the downside, pushing prices to the first support at $1.04088 or even $1.03528. The 50 EMA at $1.04355 reinforces this bullish bias, signaling continued buying interest.