US Dollar Forecast: Factory Orders in Focus, Gold and GBP/USD Outlook

USD and Gold Steady Ahead of Key US Data

The US Dollar Index (DXY) is trading near 108.87, holding firm as markets await critical U.S. economic data. Gold remains steady at $2,632 as investors adopt a cautious stance. Events ahead include the Final Services PMI (58.5 forecast) and Factory Orders (-0.3% forecast) due later today.

Focus intensifies on Friday’s major releases: Average Hourly Earnings (0.3% forecast), Non-Farm Employment Change (154K forecast), and the Unemployment Rate (4.2% forecast). These indicators will guide USD strength and gold movement, providing crucial insights into the Federal Reserve’s next steps on monetary policy.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $108.87, reflecting a slight dip of 0.04%. The price is currently testing a crucial support zone near $108.82, which aligns with the upper boundary of a prior consolidation range and the 50-day EMA at $108.39.

This area is pivotal for determining the index’s next move, as a breakdown could push DXY toward the $108.28 support level, with further downside risks targeting $107.62.

On the upside, immediate resistance is seen at $109.54, with the next target at $110.13. A sustained push above these levels could reignite bullish momentum. The 200-day EMA at $107.13 provides deeper structural support.

Gold Prices: Technical Analysis

Gold (XAU/USD) is trading at $2,632.27, facing bearish pressure after failing to break resistance at $2,662.26. Immediate support lies at $2,612.14, with stronger support at $2,583.80. The 50 EMA at $2,632.77 acts as near-term resistance, while the 200 EMA at $2,641.67 caps broader upside. Bulls need to push above $2,642.17 to regain momentum, while the descending trendline maintains downward pressure.

Sterling Weakens Amid Disappointing UK Data

The British Pound (GBP) faced headwinds on Friday as economic data fell short of expectations. M4 Money Supply stagnated at 0.0% (forecast: 0.1%), while Mortgage Approvals dropped to 66K, missing the 69K forecast. Net Lending to Individuals also declined to £3.4B, below the expected £4.4B.

Looking ahead, the Final Services PMI (forecast: 51.4) on Monday will be closely watched to assess the services sector’s resilience and its impact on Sterling.

GBP/USD Technical Analysis

GBP/USD  is trading at $1.2445, up 0.07% on the day, but facing resistance around the 38.2% Fibonacci retracement level at $1.2449. The pair remains under pressure below the 50 EMA at $1.2509 and the 200 EMA at $1.2641, reinforcing the bearish sentiment.

Immediate support is located at $1.2406, with further downside protection at $1.2325. On the upside, breaking above the $1.2509 resistance is critical for any bullish reversal, with targets at $1.2553 and $1.2607. The descending trendline continues to cap gains, signaling a cautious outlook.

The RSI hovers near 43, indicating weak momentum. Bears remain in control unless a clear breakout above $1.2509 materializes. Near-term action is likely dictated by the key resistance and support levels.