US Dollar Forecast: Strong Data Supports DXY Above $106.90 – Gold, GBP/USD, and EUR/USD Outlook

USD Firms Amid Strong Data, Pressuring Gold

The US dollar gained support on Tuesday following stronger-than-expected economic data. CB Consumer Confidence rose to 111.8, beating forecasts of 111.8 and the previous 108.7. While HPI m/m matched expectations at 0.3%, S&P/CS Composite-20 HPI y/y declined to 4.7%, below the prior 5.2%.

Gold (XAU/USD) remains under pressure as dollar strength offsets safe-haven demand, with prices holding near $2,620.

Traders await the Richmond Manufacturing Index at -10, signaling improvements from the prior -14, while new home sales dipped slightly to 725K. Key levels for gold remain critical as the dollar outlook continues to weigh on momentum.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $107.09, down 0.25%, but remains above its key pivot at $106.91, supported by the 50-day EMA at the same level. Immediate resistance is seen at $107.25, with further hurdles at $107.50 and $107.77, where sellers may re-enter.

On the downside, support lies at $106.59, with additional levels at $106.32 and $106.10. The 50-day EMA continues to underpin the uptrend, keeping sentiment cautiously bullish.

A sustained move above $106.91 could signal further gains, while a break below this level may lead to sharper selling pressure.

Gold – Technical Analysis

Gold (XAU/USD) trades at $2,620.48, down 0.21%, below the pivot level at $2,629.61. Immediate support is at $2,608.12, with deeper levels at $2,589.60 and $2,566.78.

Resistance lies at $2,651.77, followed by $2,678.56. The 50-day EMA at $2,648.12 and 200-day EMA at $2,655.84 cap gains, reinforcing bearish sentiment. A break above $2,629.61 could spark recovery, but downside risks persist unless momentum shifts.

GBP Weakens Amid Declining Retail Activity

Sterling (GBP) faced pressure as the BRC Shop Price Index y/y declined by 0.6%, showing a slower pace of retail inflation compared to the previous -0.8%. At 4:00 PM, the CBI Realized Sales are forecast at -14, down from the prior -6, signaling weakening demand.

Later at 8:00 PM, MPC Member Pill will address economic challenges, including inactivity and long-term welfare concerns. GBP traders await insights that could shape the pound’s near-term direction.

GBP/USD Technical Analysis

GBP/USD is trading at $1.25466, down 0.17%, as the pair hovers below the pivot point at $1.25773, which has turned into a key resistance level. Immediate support is seen at $1.25063, with deeper levels at $1.24669 and $1.24296, suggesting further downside potential if bearish momentum continues.

On the upside, resistance lies at $1.26138 and $1.26597, while the 50-day EMA at $1.25910 caps short-term recovery attempts. The broader bearish sentiment is reinforced by the 200-day EMA at $1.27311.

A sustained move above $1.25773 could shift sentiment toward bullish recovery, but below this pivot, sellers remain in control.

Euro Falls Amid Weak Business Sentiment

The Euro (EUR) remains pressured as the German Ifo Business Climate index fell to 85.7, missing the forecast of 86.1 and below the previous 86.5. Similarly, the Belgian NBB Business Climate improved slightly to -11.1, though it remains in contraction territory.

Market participants are also focusing on the upcoming German GfK Consumer Climate data, expected at -18.8, which could provide additional insight into economic sentiment.

ECB President Lagarde’s recent comments highlight ongoing challenges in Eurozone recovery efforts.

EUR/USD Technical Forecast

EUR/USD is trading at $1.04745, down 0.19%, as the pair remains below the pivot point at $1.04998, now acting as resistance. Immediate support lies at $1.04249, with further levels at $1.03844 and $1.03312.

Resistance levels are seen at $1.05543 and extend to $1.06020, where sellers may reassert control.

The 50-day EMA at $1.05362 reinforces bearish sentiment, while the 200-day EMA at $1.07210 highlights a broader downtrend. A break above $1.04998 could signal a potential bullish shift, but below this level, downside pressure remains dominant.