US Dollar Forecast: Strong PMI Boosts DXY, FOMC Minutes Ahead – Gold, GBP/USD, EUR/USD Outlook

USD Holds Firm as Gold Slides Ahead of Key Events

The US Dollar (DXY) steadied at 106.94 as better-than-expected Flash Services PMI (57.0 vs. 55.2) boosted confidence in economic resilience. Gold (XAU/USD), on the other hand, slipped to $2,663, down 1.60%, as strong US data curbed safe-haven demand.

Upcoming CB Consumer Confidence (forecast: 112.0) and Core PCE Price Index are critical for gauging inflation trends and potential Federal Reserve action.

Traders are also watching the FOMC meeting minutes for further monetary policy insights. As the dollar strengthens, gold faces resistance at $2,684.45, with downside risks looming near $2,649.20.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $106.94, down 0.51%, as it holds above the pivot point at $106.81, now acting as critical support. Immediate resistance lies at $107.20, with additional targets at $107.57 and $108.08 if upward momentum builds.

On the downside, support is found at $106.51, followed by $106.12 and $105.81.

The 50 EMA at $106.86 aligns closely with the pivot, highlighting its importance in maintaining a bullish structure. A sustained move above $106.81 could reinforce buying interest, while a break below this level might signal increased selling pressure.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,663, down 1.60%, testing critical support at $2,664. This level aligns with the 50 EMA at $2,664.09, making it pivotal for near-term direction.

A rebound could target resistance at $2,684 and $2,704, while a break below may expose deeper support levels at $2,649 and $2,634.

Traders should watch the $2,664 level closely, as it could determine whether gold regains bullish momentum or extends its decline.

Sterling Slips as Weak PMI and Retail Sales Weigh

The British Pound (GBP) fell after disappointing economic data. Retail Sales m/m dropped by 0.7% against a -0.3% forecast, while Flash Manufacturing PMI declined to 48.6 from 49.9.

Flash Services PMI also softened to 50.0, missing expectations of 51.9. Despite GfK Consumer Confidence improving to -18, market sentiment remains cautious.

Focus now shifts to Monday’s speeches by MPC Members Lombardelli and Dhingra, which could offer clues about future monetary policy.

GBP/USD Technical Analysis

GBP/USD is trading at $1.25975, up 0.56%, as it tests the pivot point at $1.26072. Immediate resistance stands at $1.26617, with further levels at $1.27153 and $1.27714 if the pair gains bullish traction. On the downside, support is found at $1.25537, with additional cushions at $1.25061 and $1.24569.

The 50 EMA at $1.26106 aligns closely with the pivot, reinforcing its importance as a tipping point. A break above $1.26072 could drive further bullish momentum, while a failure to hold may signal a bearish reversal.

Euro Dips as PMI Data Misses Expectations

The Euro (EUR) struggled on weak economic data. German Final GDP q/q stagnated at 0.1%, while French and German PMI figures fell below forecasts.

French Manufacturing PMI hit 43.2, below the 44.6 projection, and German Services PMI dropped to 49.4, missing the 51.6 estimate.

Market focus shifts to Monday’s German Ifo Business Climate data at 86.1, down from 86.5, and ECB President Lagarde’s insights on future monetary policy.

EUR/USD Technical Forecast

EUR/USD is trading at $1.04829, up 0.66%, attempting to recover amid a retest near the $1.05103 pivot point. Immediate resistance is at $1.05556, with further targets at $1.06082 and $1.06439 if bullish momentum continues. On the downside, immediate support lies at $1.04621, followed by $1.04249.

The 50 EMA at $1.05025 aligns with the pivot, signaling a critical level for directional cues. A sustained break above $1.05103 could shift sentiment bullish, while a failure to hold this level may reinforce downside risks.