US Dollar Price Forecast: Fed Policy in Focus as DXY Holds; Gold, GBP/USD and EUR/USD Outlook

US Dollar Strengthens; Gold Holds Steady Ahead of Fed Speeches

The US Dollar gained momentum following mixed housing data on Tuesday, as Building Permits came in at 1.42M (below the 1.44M forecast) and Housing Starts dropped to 1.31M. Investors are closely watching today’s speeches from FOMC members Barr, Cook, and Bowman for insights into the Federal Reserve’s monetary policy outlook.

Gold prices remain stable, with traders balancing the impact of a strong dollar against safe-haven demand amid ongoing economic uncertainties.  As G20 meetings wrap up, the market awaits further clarity on global economic trends and potential policy shifts influencing precious metals.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $106.325, up 0.16%, maintaining bullish momentum above the pivot point at $106.22. Immediate resistance stands at $106.63, with further barriers at $107.07 and $107.46.

On the downside, support rests at $105.97, with deeper levels at $105.63 and $105.29. The 50-day EMA at $106.01 reinforces a bullish bias, while the 38.2% Fibonacci retracement supports the index’s upward trajectory.

Staying above $106.22 could signal continued gains, while a break below may reverse sentiment. Keep an eye on $106.63 for confirmation of the next move.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,635.63, up 0.14%, holding above the $2,625.43 pivot. The 50-day EMA at $2,622.71 supports a bullish outlook. Immediate resistance lies at $2,642.00, followed by $2,659.11 and $2,678.29.

On the downside, support is seen at $2,608.07, with deeper levels at $2,589.48 and $2,567.06. Staying above $2,625.43 maintains bullish momentum, while a break below could signal sharper selling pressure.

Sterling Under Pressure as UK Inflation and BOE Policies Loom

Sterling (GBP) remains sensitive as inflation data showed CPI climbing to 2.3% YoY, above forecasts of 2.2%. Core CPI also rose to 3.3%. Bank of England Governor Andrew Bailey highlighted gradual interest rate adjustments amid rising labor costs and potential inflationary pressures stemming from the Labour government’s tax policies.

Retailers warned of a £7 billion annual cost increase due to payroll and packaging levies. Upcoming speeches by MPC Member Ramsden and housing data may further influence GBP/USD momentum.

GBP/USD Technical Analysis

GBP/USD is trading at $1.27052, up 0.19%, as it edges closer to the pivot point at $1.27297. The 50-day EMA at $1.27328 acts as immediate resistance, aligning with the next level at $1.27544.

Breaking above $1.27297 could signal further bullish momentum, with targets at $1.27934 and $1.28425.

On the downside, support lies at $1.26611, with deeper levels at $1.26146 and $1.25669. A sustained break below $1.27297 may shift momentum to bearish territory.

Euro Steady as Inflation Meets Forecast; ECB in Focus

The Euro (EUR) traded steadily as Final CPI and Core CPI met expectations at 2.0% and 2.7%, respectively, while Germany’s Current Account surged to €37.0B, exceeding forecasts of €27.0B.

German PPI data, at 0.2%, matched expectations, showing a recovery from last month’s -0.5%. Focus shifts to the ECB Financial Stability Review and President Lagarde’s speech for insights into monetary policy.

Upcoming German 30-year bond auction results will also gauge investor sentiment in the Eurozone.

EUR/USD Technical Forecast

EUR/USD is trading at $1.05850, down 0.09%, as the pair remains under pressure below the pivot point at $1.06202. The 50-day EMA at $1.06180 adds resistance to the upside, while the 38.2% Fibonacci retracement could further limit gains near $1.06591.

Immediate support lies at $1.05732, with deeper levels at $1.05277 and $1.04940. A sustained break below $1.05732 may trigger further selling pressure, while a move above $1.06202 could signal renewed bullish momentum.