US Dollar Forecast: Fed Uncertainty Drives Bullish Gold, GBP/USD, and EUR/USD Outlook

US Dollar Steady, Gold Gains Amid Key Economic Data

The US Dollar held steady as GDP growth matched expectations at 2.8%, while unemployment claims dipped to 213K, below the forecast of 215K. Core durable goods orders slightly missed expectations at 0.1%, while pending home sales surged by 2.0%, signaling resilience in the housing market.

Gold prices edged higher, supported by steady Core PCE inflation data at 0.3%, maintaining expectations for a potential Federal Reserve rate cut.

Weak Chicago PMI at 40.2 highlighted economic concerns, driving investors toward safe-haven assets like gold. With no major events ahead, markets may consolidate while weighing the implications of mixed data.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $105.76, down 0.37%, reflecting bearish sentiment as it remains below the pivot point at $105.87. Immediate support is at $105.59, with deeper levels at $105.31 and $105.00.

Resistance stands at $106.19, followed by $106.43 and $106.76. The 50-day EMA at $106.41 reinforces resistance, while the 200-day EMA at $106.08 highlights the index’s weakening momentum.

A break above $105.87 could shift the trend upward, targeting higher levels, but failure to recover may push the index toward support zones.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,662.82, up 0.96%, maintaining bullish momentum within an upward channel. Key resistance lies at $2,678.32, with support at $2,650.80. The 50-day EMA at $2,644.55 offers near-term support, reinforcing the bullish trend.

RSI signals room for further gains unless overbought levels are reached. Sustaining above $2,650 could target $2,698.38, while a break below risks selling pressure toward $2,629.30 and $2,607.51.

Sterling Outlook: BOE Bailey Speech and Lending Data

The British Pound remains steady as the UK’s M4 money supply growth softened to 0.4% from 0.6%. Mortgage approvals dipped to 65K, slightly missing expectations, while net lending to individuals rose to £4.1B, beating the previous £3.8B.

Market focus now shifts to the Bank of England’s Financial Stability Report and Governor Bailey’s speech, which may offer insights into the UK’s economic resilience and monetary policy outlook amid global uncertainties.

GBP/USD Technical Analysis

The GBP/USD pair is trading at $1.27310, up 0.38%, supported by a bullish breakout above the pivot point at $1.26833. The pair finds immediate resistance at $1.27677, with further levels to watch at $1.28050 and $1.28463. On the downside, key support lies at $1.26455, followed by $1.25890 and $1.25318.

The 50-day EMA at $1.26422 strengthens near-term support, while the 200-day EMA at $1.27035 provides an intermediate threshold. A sustained move above $1.26833 keeps the pair’s bullish momentum intact, targeting higher resistance zones.

However, a break below this level could signal a reversal toward support at $1.25890. For now, the pair remains in an upward trajectory, with cautious optimism prevailing.

Euro Weakened as German Retail Sales Slump

The Euro faced pressure as German retail sales declined by 1.5%, well below the forecast of -0.5%. Meanwhile, German import prices rose 0.6%, signaling higher costs.

French data showed consumer spending fell 0.4%, with inflation slightly easing as the French prelim CPI dropped to -0.1%.

Core CPI Flash Estimate y/y is expected at 2.8%, with German unemployment change at 20K. All eyes are on Buba President Nagel’s remarks later today.

EUR/USD Technical Forecast

The EUR/USD pair is trading at $1.05794, up 0.27%, maintaining its upward momentum amid dollar weakness and technical support around $1.05539. The pivot point at $1.05539 serves as a key level, with the pair staying bullish above it.

Immediate resistance is seen at $1.06067, followed by $1.06525 and $1.06864, while support levels are at $1.05650 and $1.04991. The 50-day EMA at $1.05316 reinforces near-term support, while the 200-day EMA at $1.05890 presents resistance.

If EUR/USD holds above $1.05539, further gains could target $1.06067 and beyond, but a break below could invite selling pressure toward $1.04991.