US Dollar Forecast: Unemployment Data to Steer Market – GBP/USD and EUR/USD Outlook

Market Overview

The US dollar remains stable as markets digest recent economic data and anticipate upcoming key reports. The CB Leading Index came in at -0.1%, matching forecasts but falling from the previous 0.4%, indicating a slowing growth trend.

Investors are now focused on the upcoming unemployment claims report, expected at 221K, and natural gas storage data, which could influence market sentiment.

Additionally, President Trump’s speech at the WEF could introduce policy cues impacting the dollar’s trajectory. Traders are watching these events closely, with the dollar maintaining its position amid mixed market signals and geopolitical developments.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is currently trading at $108.241, down 0.03%, as it hovers above the key pivot point at $107.756. Holding above this level sustains the bullish outlook, with immediate resistance at $108.777 and a stronger hurdle at $109.759.

However, the index faces downward pressure, struggling to break above the 50-day EMA at $108.729.

The longer-term support from the 200-day EMA at $108.048 suggests that any further downside could find stability around this mark. A break below the pivot may accelerate selling pressure, with support levels at $107.180 and $106.367 coming into play.

Sterling Dips as UK Borrowing Surges Beyond Expectations

The British pound faced pressure after UK public sector net borrowing surged to £17.8B, exceeding forecasts of £14.2B and the previous figure of £11.8B. The higher-than-expected borrowing indicates increased government spending, raising concerns about fiscal stability.

Investors are now eyeing the upcoming CBI Industrial Order Expectations report, which is forecast at -35, an improvement from the previous -40. The outcome of this report could influence market sentiment and determine Sterling’s near-term trajectory.

GBP/USD Technical Analysis

The GBP/USD pair is trading at $1.23189, up 0.09%, holding above the critical pivot point at $1.23017. A sustained position above this level reinforces the bullish outlook, with immediate resistance seen at $1.23749, followed by a stronger barrier at $1.24900.

The 50-day EMA at $1.22852 suggests short-term upward momentum, but the longer-term trend remains cautious with the 200-day EMA sitting higher at $1.24462.

On the downside, immediate support is at $1.22113, with deeper levels at $1.20991. A break below the pivot could accelerate selling pressure, exposing the pair to further downside risks.

Euro Steady as Investors Await ECB Speech, Confidence Data

The euro remained stable as markets focused on ECB President Christine Lagarde’s speech, which could provide insights into the central bank’s monetary policy stance. Investors also analyzed the German Buba Monthly Report for economic cues.

Looking ahead, the Eurozone Consumer Confidence index is projected at -14, improving slightly from the previous -15 reading. The data could influence market sentiment and shape expectations around the ECB’s future actions amid ongoing economic challenges in the region.

EUR/USD Technical Forecast

The EUR/USD pair is currently trading at $1.04116, showing a modest uptick of 0.03% as it hovers around a crucial pivot level at $1.04102. A sustained move above this level could reinforce bullish sentiment, with immediate resistance seen at $1.04576, followed by a stronger barrier at $1.05201.

On the downside, support is established at $1.03427, with a further safety net at $1.02656. Technical indicators present a mixed outlook; the 50-day EMA at $1.03527 signals short-term bullish momentum, while the 200-day EMA at $1.04039 suggests consolidation.