US Dollar Forecast: Insights on EUR/USD Dip and GBP/USD, Dollar Recovers to $104

Highlights

USD Outlook: Mixed Signals Ahead with Core PPI and Consumer Sentiment on Deck

The US Dollar sees a modest recovery to 104.423 following a 0.41% dip in the Dollar Index, amidst a landscape of divergent US economic indicators. Core Retail Sales and Retail Sales contracted by 0.6% and 0.8%, respectively, reflecting a cautious consumer mood.

However, slight improvements in the Empire State Manufacturing Index and a rebound in the Philly Fed Manufacturing Index offer a counterbalance.

Events Ahead

In the upcoming economic docket, the USD is poised for pivotal data releases that could steer market sentiment. Core Producer Price Index (PPI) and PPI, both anticipated at 0.1%, are set to offer a glimpse into the inflationary landscape of the US economy.

Additionally, Building Permits, expected at 1.51 million, alongside the Preliminary University of Michigan Consumer Sentiment Index, pegged at 80.0, are crucial for gauging the health of the housing market and the overall economic optimism among consumers.

In the Eurozone, the focus shifts towards inflation and economic health indicators, with France’s Final Consumer Price Index (CPI) and Germany’s Wholesale Price Index (WPI) under the spotlight. Across the Channel, the UK’s Retail Sales data emerges as a critical factor, with projections hinting at a rebound.

US Dollar Index (DXY)

The Dollar Index’s pivotal point holds around 103.901, indicating a bullish sentiment as it trades above this mark.

Resistance levels are identified at 104.304, 104.595, and 104.792, potentially capping upward movements. Support levels are delineated at 103.659, 103.359, and 103.056, offering floors to buffer any declines.

The 50-Day and 200-Day Exponential Moving Averages, at 103.934 and 103.277 respectively, reinforce the bullish outlook, particularly as the index sustains above the 103.900 level, suggesting continued upward momentum.