US Dollar Forecast: NFP Miss, CPI in Focus This Week– GBP/USD & EUR/USD Outlook

Market Overview

The US Dollar (DXY) remains steady after mixed economic data. The Non-Farm Payrolls report showed a weaker-than-expected 143K job gain in January, missing forecasts of 169K and marking a sharp drop from December’s 307K.

However, Average Hourly Earnings rose 0.5%, surpassing expectations, while the Unemployment Rate unexpectedly dropped to 4.0%. This mix suggests a tight labor market but a cooling job sector.

Upcoming Key Events: The market now turns to February 12, when the US CPI (Consumer Price Index) report will provide a clearer outlook on inflation.

Analysts expect Core CPI at 0.3% m/m, with yearly CPI holding at 2.9% y/y. Federal Reserve officials, including Powell, will testify, which could impact rate expectations.

Investors are also watching February 14’s Retail Sales report and the February 13 PPI (Producer Price Index) to gauge inflation trends. The USD remains bullish above 108.101, but a break below this level could weaken sentiment.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is hovering at $108.270, inching up 0.01%, as traders weigh economic data and Federal Reserve expectations. The pivot point at $108.101 is the key level to watch—staying above it could reinforce bullish sentiment, while a drop below may accelerate selling pressure.

On the upside, immediate resistance is at $108.650, with a break higher potentially opening the door to $109.028. If the index loses ground, support at $107.822 could provide stability, though a breach could expose $107.392.

The 50-day EMA at $108.019 suggests near-term support, while the 200-day EMA at $108.185 signals consolidation. The trend leans bearish below $108.101, but a breakout above could revive buying interest, making this a crucial level for traders.

GBP/USD Technical Analysis

The GBP/USD pair is trading around $1.24088, inching up 0.01% as traders navigate shifting sentiment. The pivot point at $1.24150 is a crucial battleground—staying above it could sustain bullish momentum, while a drop below may invite sellers.

On the upside, immediate resistance stands at $1.24900, followed by $1.25502, where bulls will need strong momentum to break through. On the downside, support at $1.23639 offers a near-term cushion, with deeper losses eyeing $1.22988.

The 50-day EMA at $1.24307 sits slightly above the current price, posing near-term resistance, while the 200-day EMA at $1.24087 acts as immediate support. The upward trendline remains intact, favoring buyers, but a decisive break below $1.24150 could shift momentum sharply in favor of the bears.

EUR/USD Technical Forecast

The EUR/USD pair is hovering around $1.03157, down 0.01%, as traders assess market momentum. The pivot point at $1.03489 is acting as a key inflection zone—holding above it could keep the pair in bullish territory, while a break below might accelerate selling pressure.

On the upside, immediate resistance is at $1.04112, with the next hurdle at $1.04668. A sustained break above these levels could signal further upside. On the downside, support sits at $1.02817, with deeper losses possibly extending to $1.02124.

The 50-day EMA at $1.03586 and 200-day EMA at $1.03728 suggest resistance overhead, but the upward trendline remains intact, keeping buyers optimistic.