US Dollar Forecast: DXY Dips to $104, Awaits Fed Speeches & Trade Balance Data

Economic Indicators Weigh on Currencies

The Dollar Index has seen a modest decline, trading at $104.037, down by approximately 0.10%.  In Europe, German Industrial Production unexpectedly contracted by 1.6%, a sharper decline than the forecasted 0.4% decrease. This follows a surprising surge in German Factory Orders by 8.9% and a dip in Retail Sales by 1.1%.

For the GBP, the Halifax HPI showed a stronger than expected growth of 1.3%, suggesting resilience in the UK housing market. However, the Construction PMI indicated contraction at 48.8, signaling pressures in the construction sector.

Events Ahead

US Dollar Index (DXY)

Dollar Index
Dollar Index

EUR/USD Price Chart - Source: Tradingview
EUR/USD Price Chart – Source: TradingviewEUR/USD edges higher, gaining 0.15% to trade at 1.07687, amid fluctuating market dynamics. The pair navigates through key Fibonacci retracement levels, finding immediate resistance at 1.07891 (38.2%), with subsequent barriers at 1.08097 (50%) and 1.08297 (61.8%).

Support lies at 1.07364, extending to 1.07115 and 1.06934, marking crucial thresholds for potential pullbacks. The 50-day and 200-day Exponential Moving Averages, at 1.08047 and 1.08661 respectively, provide a broader perspective on market sentiment.

Positioned above the pivot point of 1.07645, EUR/USD exhibits a bullish stance, contingent on sustaining this level, signaling potential upward momentum in the near term.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart – Source: TradingviewGBP/USD sees a modest uptick, rising 0.18% to 1.26181, as it approaches key technical milestones. The currency pair faces immediate resistance at Fibonacci levels: 1.2644 (38.2%), 1.26743 (50%), and 1.27215 (61.8%).

Support is found at 1.25772, with further cushions at 1.25171 and 1.24780, which could play pivotal roles during pullbacks. The 50-day and 200-day Exponential Moving Averages, at 1.26446 and 1.26621 respectively, hover near resistance levels, suggesting a taut balance between bullish and bearish forces.

Positioned above the pivot point of 1.26144, GBP/USD’s trajectory appears cautiously optimistic, indicating potential for further gains if it maintains above this threshold.

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