US Dollar Forecast: Nonfarm Payrolls Key for Gold, GBP/USD, and EUR/USD Outlook

US Dollar Softens, Gold Steady Amid Mixed US Data

The US Dollar weakened as mixed economic data shaped market sentiment. Weekly unemployment claims rose to 224K, exceeding the forecast of 215K, while the trade balance narrowed to -$73.8B, reflecting improving exports. Natural gas storage also reported a drawdown of -30B, lower than expected.

Meanwhile, gold held steady near $2,638, bolstered by safe-haven demand and expectations of a dovish Federal Reserve stance.

Upcoming events, including the non-farm payroll report (forecast at 218K) and preliminary consumer sentiment data, will provide further direction for both gold and the dollar.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $105.846, slightly down by 0.11%, as it navigates a downward channel that continues to apply resistance near $105.850. The pivot point at $105.710 acts as a critical level, providing a base for bullish momentum. Immediate resistance is at $105.989, with additional targets at $106.217 and $106.399.

On the downside, support lies at $105.544, followed by $105.388 and $105.242. The 50-day EMA at $106.146 and the 200-day EMA at $106.128 highlight near-term resistance, reinforcing the bearish undertone.

A sustained break above $105.850 may signal bullish recovery, while a dip below $105.710 could amplify selling pressure, targeting lower support zones.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,640.30, up 0.32%, but remains below the critical pivot at $2,644.90. Key resistance targets are $2,657.02 and $2,666.24, with support at $2,634.00 and $2,623.66.

The 50-day EMA at $2,642.35 offers near-term stability, while the 200-day EMA at $2,646.99 highlights resistance.

A break above $2,644.90 may confirm bullish momentum, while a sustained dip below this level could shift sentiment to bearish, targeting lower support levels.

Sterling Gains on Strong Construction PMI and Housing Data

The British Pound strengthened as robust economic data boosted sentiment. The UK Construction PMI surged to 55.2, surpassing the forecast of 53.5 and the prior 54.3, signaling strong sector growth.

Additionally, Halifax HPI m/m posted a surprising 1.3% rise, far exceeding the 0.3% estimate and previous 0.2%, reflecting resilience in the housing market.

Sterling’s outlook remains supported by improving fundamentals, while traders await insights from MPC Member Greene’s comments for further clues on monetary policy direction.

GBP/USD Technical Analysis

GBP/USD is trading at $1.27508, slightly down by 0.05% in the session, as it remains above the pivot point at $1.27389. This level aligns with near-term bullish sentiment, supported by an upward channel providing a foundation for further gains.

Immediate resistance stands at $1.27703, with subsequent targets at $1.27932 and $1.28143. On the downside, key support is found at $1.27136, followed by $1.26863 and $1.26600.

The 50-day EMA at $1.27058 and the 200-day EMA at $1.27018 underline a supportive zone, suggesting a bullish structure. A sustained move above $1.27389 could open the door to higher resistance levels.

Euro Declines as Factory Orders, Retail Sales Disappoint

The Euro faced pressure as mixed economic data raised concerns. German Factory Orders fell by 1.5%, better than the forecasted -2.0% but far below last month’s 7.2% surge.

French Industrial Production dipped by 0.1%, missing expectations of 0.2%, while Retail Sales across the Eurozone declined by 0.5%, underperforming the predicted -0.3%.

Meanwhile, German Industrial Production dropped 1.0%, countering a forecasted 1.0% gain. These figures underscore ongoing economic challenges, impacting sentiment around the Euro.

EUR/USD Technical Forecast

EUR/USD is trading at $1.05728, down 0.12%, as prices hover above the critical pivot point at $1.05627. This level marks a key balance point between bullish and bearish sentiment. Immediate resistance is positioned at $1.06082, with higher targets at $1.06388 and $1.06626.

On the downside, support levels lie at $1.05359, followed by $1.05039 and $1.04725. The 50-day EMA at $1.05370 reinforces near-term support, while the 200-day EMA at $1.05622 closely aligns with the pivot, adding weight to its significance.

Traders should watch for a sustained break above $1.05627 to confirm bullish momentum, targeting $1.06082.