US Dollar Forecast: G7 Meetings and Import Prices in Focus – Gold, GBP/USD and EUR/USD Outlook

US Dollar Gains as PPI Rises; Gold Faces Pressure

The U.S. dollar strengthened following better-than-expected PPI data, with Core PPI at 0.2% and PPI at 0.4%, reflecting persistent inflationary pressures. Unemployment claims rose to 242K, signaling potential labor market softening but insufficient to deter rate expectations.

Gold prices remain under pressure as a stronger dollar and rising yields curb safe-haven demand.

Investors now await Import Prices data (-0.2% forecast) and G7 meetings for further cues. While the dollar retains an edge, gold could gain traction if inflation concerns persist and geopolitical risks escalate. Key levels for gold are $2,675 support and $2,701 resistance.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $107.121, up 0.11%, reflecting bullish momentum on the 4-hour chart. Prices have broken above the pivot point at $106.96, suggesting further upside potential. Immediate resistance is seen at $107.50, with the next levels at $108.07.

On the downside, support is positioned at $106.35, followed by $105.79. The 50 EMA at $106.58 and the 200 EMA at $106.28 confirm the bullish breakout, supported by a downward trendline reversal.

Holding above $106.96 remains critical to sustaining the current trend, while a break below this level could invite selling pressure. Traders should keep an eye on resistance at $107.50 as a key test for bullish continuation.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,688.85, up 0.29%, maintaining bullish momentum above the $2,675.71 pivot and the 50 EMA at $2,685.54. Immediate resistance is at $2,701.01, with support at $2,664.27 and $2,656.06.

A break below the pivot could target the 200 EMA at $2,662.84. Fibonacci retracement at 23.6% supports the bullish trend, with holding above $2,675.71 crucial for further gains.

Sterling Dips on Weak GDP and Trade Balance Data

The British pound weakened following disappointing economic data. GDP m/m came in at -0.1%, below the 0.1% forecast. Goods trade balance widened to -£19.0B, reflecting economic strain.

Industrial and manufacturing production both contracted by -0.6%, missing expectations. Consumer confidence remained weak at -17, reflecting cautious sentiment.

Markets now focus on inflation expectations (forecast 2.7%) and the NIESR GDP estimate for further cues. Sterling’s near-term outlook remains subdued amid weak fundamentals.

GBP/USD Technical Analysis

GBP/USD is trading at $1.26185, down 0.36%, as the pair extends its decline within a downward channel on the 4-hour chart. Prices remain below the pivot point at $1.26641, indicating bearish sentiment. Immediate resistance is at $1.27138, with the next hurdle at $1.27991, while support sits at $1.25890 and deeper at $1.25259.

The 50 EMA at $1.27236 and the 200 EMA at $1.27181 reinforce selling pressure. A break above $1.26641 could signal a shift toward bullish momentum, but for now, sellers appear in control.

Euro Pressured by Weak German Trade and ECB Update

The euro faces pressure as German trade data missed expectations, coming in at €13.4B versus a €15.7B forecast. Industrial production m/m is projected at 0.0%, signaling stagnation after the previous -2.0%. Meanwhile, the ECB kept rates steady at 3.15%, with no surprises in its monetary policy statement.

Italy’s unemployment rate improved to 6.1%, offering some regional optimism. Markets now focus on the G7 meetings for potential global economic updates affecting the euro.

EUR/USD Technical Forecast

EUR/USD is trading at $1.04593, down 0.07%, continuing its descent within a downward channel on the 4-hour chart. The pair is below the pivot point at $1.04801, signaling bearish momentum.

Immediate resistance lies at $1.05209, while support holds at $1.04253, with deeper levels at $1.03850. The 50 EMA at $1.05066 and the 200 EMA at $1.05430 underline short-term pressure, keeping sellers in control. A move above $1.04801 could shift momentum toward the upside, but for now, the bears dominate.