US Dollar Price Forecast: UK Retail Sales Lift Sentiment, Gold, GBP/USD, and EUR/USD Outlook

Gold Rises as US Dollar Index Slips After Strong Retail Sales Data

Gold prices surged to near $2,710, supported by a weakening US Dollar Index. Strong 0.5% core retail sales data, exceeding expectations of 0.1%, helped push the dollar lower.

The retail sales figure of 0.4% also outperformed forecasts, reinforcing gold’s safe-haven appeal as the dollar softens.

Meanwhile, the US Dollar Index dipped further as unemployment claims held steady at 241K, and the Philly Fed Manufacturing Index jumped to 10.3, far above the expected 1.7.

Investors will watch upcoming housing data and the FOMC speech for signals on monetary policy, potentially impacting both gold and the dollar’s direction.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at 103.62, down 0.14%, but remains above its key pivot point at $103.51.

As long as it holds above this level, the outlook remains bullish, with immediate resistance at $103.83 and further targets at $103.98 and $104.12.

The 50-day EMA at $103.40 provides near-term support, reinforcing the current upward channel, while the 200-day EMA at $102.51 offers a longer-term floor.

However, if DXY drops below the $103.51 pivot, we could see a sharper selloff, with the first support at $103.34, followed by deeper support at $103.19 and $103.03.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,709.24, up 0.61%, with bullish momentum. The 50-day EMA at $2,662.10 and 200-day EMA at $2,608.29 support a long-term uptrend.

A key pivot point at $2,711.11 signals further gains toward $2,722.87 and $2,733.65, while immediate support at $2,688.79 could trigger a pullback if breached.

Sterling Rises on Stronger-Than-Expected Retail Sales

Sterling (GBP) gained momentum as UK retail sales rose 0.3% in October, outperforming the expected decline of -0.4%. The stronger data provided a boost to the currency, signaling resilience in consumer spending despite previous volatility, which could support the pound in the short term.

GBP/USD Technical Analysis

The GBP/USD is currently trading at $1.3060, up 0.38%, but it faces strong resistance near the pivot point at $1.3076. A break above this level could open the door to testing immediate resistance at $1.3094 and potentially higher levels at $1.3127 and $1.3155.

However, the pair is retesting a previously violated symmetrical triangle pattern, where support has now turned into resistance, suggesting a possible bearish bias.

The 50-day EMA at $1.3030 is providing near-term support, while the 200-day EMA at $1.3113 could limit further gains. Immediate support sits at $1.3038, with stronger support at $1.3011. If the pair falls below the pivot, the downside could accelerate toward $1.2973.

Euro Steadies After ECB Holds Rates, Market Awaits December Easing

The euro remained stable after the ECB left its refinancing rate at 3.40%. With inflation easing to 1.7% and trade balances narrowing, traders anticipate further cuts in December.

The Italian trade balance fell to €1.43B, reflecting wider eurozone economic pressures.

Investors are pricing a possible 20% chance of a half-point rate cut at the ECB’s December meeting, with significant attention on future monetary policy developments as the eurozone navigates potential soft landings.

EUR/USD Technical Forecast

The EUR/USD is trading at $1.0843, up 0.12%, but facing resistance near the key pivot point at $1.0864. If the pair can break above this level, it could push toward immediate resistance at $1.0880 and potentially test higher levels at $1.0898 and $1.0916.

However, a downward trendline suggests that the EUR/USD may struggle to break through this zone, signaling potential bearish pressure. Immediate support lies at $1.0837, with stronger support at $1.0821 and $1.0803.

The 50-day EMA at $1.0875 indicates near-term resistance, while the 200-day EMA at $1.0967 points to a more significant longer-term ceiling. A break below the pivot could trigger a sharper pullback.