US Dollar Price Forecast: EUR/USD Pressured as Sentix Confidence Looms, Key Support in Focus

Market Overview

The Eurozone’s final employment change held steady at 0.2%, in line with expectations, while the revised GDP growth also met forecasts at 0.2%. This limited economic growth has kept the EUR/USD pair pressured around $1.1060.

Meanwhile, the Dollar Index is hovering near 101.39, as U.S. data surprised with weaker-than-expected non-farm payrolls at 142K (vs. forecast of 164K), though the unemployment rate remained stable at 4.2%. U.S. average hourly earnings rose by 0.4%, surpassing expectations, signaling potential inflationary pressures.

Events Ahead

In the upcoming sessions, EUR/USD will be closely watching the Sentix Investor Confidence report, which is forecasted to come in at -12.4, slightly better than the previous -13.9.

For the dollar, the USD Final Wholesale Inventories data and Consumer Credit figures at $12.3B could offer further insight into U.S. economic resilience.

US Dollar Index (DXY)

The Dollar Index (DXY) is trading at $101.395, up 0.08% for the day, showing a bullish tone. With a pivot point at $101.157, the index has pushed above its 50-day EMA at $101.275, suggesting further upside potential. Immediate resistance sits at $101.568, with the next targets at $101.742 and $101.922.

A break above these levels could confirm upward momentum, especially as the index aims for the 200-day EMA at $101.637. On the downside, immediate support rests at $100.892.

If the Dollar Index falls below the pivot point, we could see sharper selling pressure. For now, staying bullish above $101.157 seems prudent, as the market continues to trend higher.

US 10-year Bond Yields

The US 10-year Treasury yield is currently at 3.742%, reflecting a slight decline of 0.11%. The chart shows a short-term downtrend, with yields struggling to break above the 50-day EMA at 3.767%. The 200-day EMA at 3.840% serves as a stronger resistance.

This declining yield suggests lower expectations for future interest rate hikes, which could weaken the US dollar. A falling yield often signals investors shifting toward safer assets like bonds, reducing the appeal of the dollar.

However, if yields break higher, the dollar could regain strength due to expectations of tighter monetary policy.

EUR/USD Technical Forecast

The EUR/USD is trading at $1.10681, down 0.04% for the day, as the pair struggles to stay above key levels. The pivot point at $1.10878 is acting as a critical threshold—if the Euro can break above it, we might see some bullish momentum targeting the resistance levels at $1.11073 and $1.11356.

However, failure to do so could open the door for a deeper slide, with immediate support at $1.10588 and lower levels at $1.10433.

With the 50-day EMA at $1.10863 and the 200-day EMA at $1.10692, the technical setup suggests a bearish bias below $1.10878. For now, it’s prudent to remain cautious and lean bearish until the pair breaks higher.