USD Holds Firm Amid Fed Decisions; Gold Steady on Geopolitical Tensions

The US Dollar remained resilient at 4.50%, following the Federal Reserve’s decision to drop interest rates to 4.50%. While housing starts missed forecasts, building permits surpassed expectations, showcasing mixed economic signals.

Gold prices, trading near $2,605, benefited from geopolitical risks and safe-haven demand despite the dollar’s strength. Traders remain cautious, awaiting Thursday’s GDP and unemployment claims data, which could further influence market dynamics.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at 108.01, down 0.17%, showing a slight decline in momentum as it tests the pivot point at $107.97. Immediate resistance is seen at $108.27, with a stronger hurdle at $108.63.

On the downside, support is located at $107.51, followed by $107.18, which could provide a safety net for buyers if bearish pressure intensifies. The 50-day EMA at $106.93 and the 200-day EMA at $106.05 highlight the index’s longer-term bullish trend. However, a failure to hold above $107.97 could indicate further selling pressure.

Conversely, a break above the pivot might reignite bullish sentiment, targeting $108.27 as the next level.

GOLD – Technical Analysis

Gold (XAU/USD) is trading at $2,605.73, up 0.78%, with the pivot at $2,632.28 as a key level. Resistance lies at $2,663.39 and $2,715.68, while support levels are $2,583.97 and $2,537.62.

The 50-day EMA at $2,651.28 and 200-day EMA at $2,654.80 indicate bearish pressure.

A break above the pivot may trigger bullish momentum, while failure to hold this level risks a drop toward $2,583.97. Traders should watch for decisive movements.

Sterling Steady as CPI Meets Forecasts; BoE in Focus

Sterling (GBP) held steady after UK CPI data aligned with forecasts, rising 2.6% year-on-year. Core CPI increased to 3.5%, slightly below the 3.6% forecast, while RPI reached 3.6%, meeting expectations. PPI Output m/m edged up to 0.3%, signaling modest producer price growth.

The Bank of England’s upcoming monetary policy decision and rate votes remain key for market direction. Investors anticipate clarity on future rate paths, with the official rate expected to stay at 4.75%.

GBP/USD Technical Analysis

The GBP/USD pair is trading at 1.26108, up 0.30% as it hovers near the pivot point at $1.26328, a critical level for determining the next directional move. Immediate resistance is located at $1.26875, with a stronger barrier at $1.27804. On the downside, support is marked at $1.25543, with deeper levels at $1.24867.

Technical indicators show the 50-day EMA at $1.26820 and the 200-day EMA at $1.27465, signaling overhead pressure. The upward trendline breakout near $1.26328 could act as a catalyst for bearish momentum.

A sustained move below this level might drive the pair toward $1.25543. However, a decisive break above $1.26328 could shift the focus to $1.26875.

Euro Steady as CPI Aligns; Consumer Sentiment Improves

The Euro (EUR) remained stable after Final Core CPI met expectations at 2.7% y/y. However, Final CPI slightly missed, landing at 2.2% y/y versus a 2.3% forecast. German GfK Consumer Climate improved to -21.3, beating expectations of -22.6 and the prior -23.1.

Traders now focus on the upcoming Eurozone Current Account data, expected at €33.5B, for further direction. Mixed data indicates resilience but underscores challenges for sustained economic recovery.

EUR/USD Technical Forecast

The EUR/USD pair is trading at 1.03964, up 0.45%, as it tests key technical levels within a cautious market environment. The pivot point at $1.04548 is a critical threshold for market direction. Immediate resistance lies at $1.05141, with further targets at $1.06037, while support levels are identified at $1.03461 and $1.02722.

Technical indicators paint a mixed picture. The 50-day EMA at $1.04897 and the 200-day EMA at $1.05858 indicate downward pressure.

A symmetrical triangle breakout on the bearish side increases the likelihood of a sharp decline. A break below $1.04548 could drive selling momentum toward $1.03461. Conversely, reclaiming $1.04548 could reignite bullish sentiment, targeting $1.05141.