US Dollar Forecast: PMI Surprises Shake Up Gold, GBP/USD, and EUR/USD Outlook

US Dollar Weakens, Gold Stable Amid Jobs and PMI Data

The US dollar slipped as the ADP Non-Farm Employment Change missed expectations at 146K, below the forecast of 152K. Weak ISM Services PMI at 52.1 and soft Final Services PMI at 56.1 added pressure on the greenback.

Meanwhile, gold prices held steady, reflecting market caution ahead of Powell’s speech and the Beige Book.

Lower crude inventories (-5.1M) supported oil prices, while traders anticipate further insights from upcoming job cuts and trade balance data on Thursday.

Geopolitical uncertainties and mixed US economic signals continue to shape market sentiment.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $106.14, down 0.20%, reflecting a bearish tone as it moves below its pivot point at $106.38. Immediate support is at $106.10, followed by $105.92 and $105.69. Resistance lies at $106.53, with further hurdles at $106.72 and $106.92.

The 50-day EMA at $106.33 and 200-day EMA at $106.37 underscore the pivot’s significance as a critical level. A descending breakout from an ascending triangle pattern signals potential for further declines.

A recovery above $106.38 could, however, reignite bullish momentum. With the technical setup leaning bearish, traders should closely watch the $106.38 level for decisive price action.

Gold – Technical Analysis

Gold (XAU/USD) trades at $2,648.36, down 0.07%, hovering above its pivot at $2,644.81. A symmetrical triangle signals a potential breakout. Resistance levels stand at $2,657.02 and $2,666.24, with support at $2,632.46.

The 50-day EMA at $2,646.51 reinforces support, aligning closely with the 200-day EMA at $2,644.79.

A move above $2,644.81 could ignite bullish momentum, targeting higher resistance levels. However, a drop below this pivot risks bearish pressure.

Sterling Flat Amid BOE Rate Cut Signals and PMI Data

The pound remained steady after BOE Governor Bailey hinted at up to four rate cuts in 2024, citing faster-than-expected inflation cooling. Markets are pricing in three cuts over the next year, with rates likely to hold in December.

Meanwhile, Final Services PMI improved slightly to 50.8, signaling marginal expansion. Traders now await Thursday’s Construction PMI and remarks from MPC Member Greene for further clarity on the Bank of England’s policy trajectory.

GBP/USD Technical Analysis

GBP/USD is trading at $1.27185, up 0.14% for the session, reflecting a cautiously bullish tone. The pair remains above its pivot point at $1.26916, signaling potential upward momentum.

Immediate resistance lies at $1.27217, followed by targets at $1.27452 and $1.27693. Key support levels include $1.26610, $1.26408, and $1.26173.

The 50-day EMA at $1.26873 and the 200-day EMA at $1.26676 reinforce near-term support, underscoring $1.26916 as a critical level. A break above $1.27217 could pave the way for further gains, while a dip below $1.26916 may trigger sharper selling.

Euro Stays Subdued Amid Mixed PMI Data and Lagarde’s Remarks

The euro saw limited movement as mixed PMI data highlighted uneven growth in the services sector. Spanish PMI dropped to 53.1, while Italian PMI declined to 49.2.

French PMI improved slightly to 46.9. ECB President Lagarde reiterated a dovish tone, stating that rate cuts would continue, though their pace remains uncertain.

German PPI met expectations at 0.4%, while upcoming industrial and retail data will provide further direction for the euro.

EUR/USD Technical Forecast

EUR/USD is trading at 1.05274, up 0.17% on the session, reflecting modest bullish momentum. The pair remains above its pivot point at 1.05067, indicating a potential move higher. Immediate resistance is positioned at 1.05416, with further targets at 1.05616 and 1.05841. Support is seen at 1.04827, followed by 1.04601 and 1.04432.

The 50-day EMA at 1.05132 and the 200-day EMA at 1.05233 are providing near-term support, reinforcing the pivot level as a key inflection point.

A symmetrical triangle pattern on the 4-hour chart suggests consolidation, signaling an impending breakout. Traders should watch for a decisive move above 1.05416 for bullish confirmation or below 1.05067 for bearish continuation.