US Dollar Price Forecast: UK Retail Sales Surprise; GBP/USD and EUR/USD Outlook

US Dollar Rises on Strong Jobs Data, Fed in Focus

The US dollar strengthened after positive economic data on Thursday. Unemployment claims dropped to 219K, beating expectations of 230K, signalling a robust labour market. The Philly Fed Manufacturing Index was also surprised with a reading of 1.7, well above the forecast of -0.8, showing unexpected manufacturing strength.

However, existing home sales came in lower than anticipated at 3.86M, adding mixed signals to the broader economy.  Investors are now eyeing Federal Reserve member Harker’s upcoming speech on Friday, which could provide further clues on future monetary policy and impact the dollar’s near-term direction.

US Dollar Index (DXY) – Technical Analysis 

The Dollar Index (DXY) is trading at $100.574, down 0.10%, indicating a slight bearish momentum. The price is hovering just below its pivot point at $100.62, which serves as a key resistance level. Immediate resistance is $100.91, followed by $101.17 and $101.46.

On the downside, immediate support is located at $100.22, with further levels at $100.02 and $99.82.

The 50-day EMA at $100.96 suggests continued near-term weakness, while the 200-day EMA at $101.76 reinforces the broader bearish outlook.

As long as the Dollar Index remains below $100.62, selling pressure may persist, but a break above this level could shift the sentiment to bullish.

Sterling Steady After Strong Retail Sales Data

The British pound held firm after the latest UK retail sales data showed a stronger-than-expected rise of 1.0% in August, beating forecasts of 0.3%. This positive surprise comes amid a backdrop of steady monetary policy, with the Bank of England holding interest rates at 5.00%.

The Monetary Policy Committee (MPC) voted 0-1-8, reflecting a divided stance on future rate hikes. While consumer spending continues to support the economy, the split in voting suggests uncertainty about the future path of rate adjustments.

GBP/USD Technical Forecast

The GBP/USD is trading at $1.33234, up 0.10%, signaling modest bullish momentum. The pair is comfortably holding above the pivot point of $1.32720, which is acting as a crucial support level.

Immediate resistance is at $1.33587, followed by $1.34009 and $1.34424, should the bullish trend continue.

On the downside, key support lies at $1.32283, with further levels at $1.31830 and $1.31469. The 50-day EMA at $1.31853 provides strong near-term support, while the 200-day EMA at $1.30711 underlines the broader bullish sentiment.

As long as GBP/USD stays above $1.32720, the outlook remains positive, but a break below this level could trigger a shift towards a bearish trend.

Euro Awaits Lagarde Speech Amid Mixed Data Signals

The euro remained stable as investors focused on upcoming remarks from ECB President Christine Lagarde. Earlier data showed a mixed economic picture, with Germany’s current account surplus narrowing to €39.6B, below expectations of €40.3B.

Additionally, Germany’s Producer Price Index (PPI) for September is forecasted to rise by 0.2%, in line with previous figures. Later today, the Consumer Confidence index is expected to hold steady at -13.

Market participants are closely watching these indicators and Lagarde’s speech for insights into the ECB’s monetary stance, especially amid growing concerns about economic growth across the Eurozone.

EUR/USD Technical Forecast

The EUR/USD is trading at $1.11759, up by 0.04%, maintaining a slightly bullish trend. The pivot point at $1.11631 is acting as a crucial support level, and the pair is hovering just above it.

Immediate resistance stands at $1.12007, followed by $1.12288 and $1.12558. On the downside, key support levels are found at $1.11257 and $1.10933.

The 50-day EMA at $1.11090 provides solid near-term support, reinforcing the bullish sentiment, while the 200-day EMA at $1.10475 reflects a broader uptrend. The bullish bias remains strong above $1.11631, but any break below this level could trigger a sharper selloff.