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US Dollar Price Forecast: DXY Climbs to $103.600 Amid Consumer Confidence, FOMC Ahead
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With the DXY hitting $103.600, buoyed by optimistic economic data, eyes are now set on the ADP Employment Change and the pivotal FOMC meeting.
In this article:
Highlights
- US dollar rises to $103.600, bolstered by robust economic data and labor market strength.
- Upcoming data releases, including ADP Employment Change and FOMC, to shape market direction.
- EUR/USD and GBP/USD face headwinds; technical indicators suggest cautious bearish sentiment.
Dollar Strengthens Ahead of FOMC and Fed Rate
In today’s trading, the US dollar appreciated by 0.20%, reaching $103.600 amid the release of US economic data, with the Consumer Confidence index reporting at 114.8, above the anticipated 114.2, and JOLTS Job Openings indicating a robust labor market with 9.03 million vacancies, exceeding the forecast of 8.93 million.
Events Ahead
Looking ahead, the financial calendar is packed with significant US data releases. The ADP Non-Farm Employment Change is expected to reveal 148,000 new jobs, slightly below the previous 164,000 projection.
The Employment Cost Index, a key inflation gauge, is predicted to show a 1.0% rise. Additionally, the Chicago PMI and the Federal Funds Rate announcement are on the horizon, with the interest rate projected to remain at 5.50%.
US Dollar Index (DXY)
On January 31, the Dollar Index’s pivot point stands at 103.398 with potential resistance levels at 103.748, 104.037, and 104.280. Support levels are closely set at 103.141, with further cushions at 102.760 and 102.385, indicating a narrow trading range that could influence future movements.
Technical analysis reveals a bearish engulfing candlestick pattern on the 4-hour timeframe, positioned just below the pivot point and coinciding with a descending trendline. This pattern suggests that sellers are gaining control, particularly as the price action remains under the critical level of $1.08484.
GBP/USD Technical Forecast
The GBP/USD pair experienced a slight decline of 0.17%, settling at 1.26756 with pivot point at 1.26989, hinting at potential bearish momentum in the short term. Resistance levels are staged at 1.27424, 1.27763, and 1.28139, which could challenge any upward movement. Support is found at 1.26557, followed by 1.26244 and 1.25975, providing a cushion against further drops.
Technical analysis indicates the GBP/USD is currently navigating through a tight range, specifically between 1.2775 and 1.2650, as markets await forthcoming policy decisions. This consolidation suggests a cautious stance among traders.
Given the pair’s proximity to both the 50-Day Exponential Moving Average (EMA) at 1.27012 and the 200-Day EMA at 1.26725, the technical outlook leans towards a bearish bias below the pivot point of 1.26989.
About the Author
Arslan Aliauthor
Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.
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