EUR/USD, GBP/USD, DXY Price Forecast: Good Friday Eyes on Fed Talks

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Published: Mar 29, 2024, 07:49 UTC

Key Points:

U.S. Core PCE Price Index forecast at 0.3%, crucial for dollar and currency pairs.
German job market tightens with a 4K unemployment change; Eurozone liquidity up by 0.4%.
UK's current account deficit better than expected at -£21.2B, despite -0.3% GDP contraction.

Market Overview

The market is closely watching the U.S. Core PCE Price Index, with expectations set at a 0.3% increase, which could impact the dollar’s strength and, consequently, these currency pairs.

In Europe, recent data indicated a German Unemployment Change of 4K, less than the anticipated 10K, signaling a tighter labor market. Meanwhile, the Eurozone’s M3 Money Supply grew by 0.4% year-on-year, reflecting subdued liquidity expansion.

For the GBP, the UK’s current account showed a deficit of -£21.2 billion, slightly better than expected, amidst a contracting quarterly GDP of -0.3%.

Events Ahead

Looking ahead, key events include speeches by FOMC Member Daly and Fed Chair Powell, which could provide further guidance on U.S. monetary policy. Additionally, French Consumer Spending and Prelim CPI data will offer insights into Eurozone economic health, with forecasts at 0.3% and 0.5% respectively.

These figures are crucial for the EUR/USD forecast, as they influence the European Central Bank’s policy decisions. For the GBP/USD, the focus will be on the broader market sentiment and economic indicators from both the UK and the U.S., especially with UK banks closed for Good Friday.

US Dollar Index (DXY)

Dollar Index

Dollar Index slightly increased to 104.634, up by 0.09%. It is currently trading above the pivot point of 104.496, suggesting a bullish trend. The immediate resistance levels are at 104.736, 104.978, and 105.248, which could cap upward movements.

Support levels are identified at 104.187, 103.989, and 103.675, providing downside protection. The 50-day EMA at 104.105 and the 200-day EMA at 103.761 both indicate an underlying strength in the dollar.

The trend remains bullish above the pivot, but a fall below 104.496 could trigger a significant downturn in the index’s value.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

EUR/USD dipped to 1.07748, a decline of 0.11%. Trading just below the pivot point of 1.07897, it faces immediate resistance at 1.08201, 1.08552, and 1.08885. Support levels are set at 1.07665, 1.07333, and 1.07065.

The 50-day EMA at 1.08342 and the 200-day EMA at 1.08519 suggest that the pair is experiencing slight pressure but remains near critical support levels.

Despite the downward movement, the pair’s maintenance above the $1.07750 level indicates potential for a bullish reversal if it surpasses the pivot point, yet remains bearish below 1.07897, highlighting a delicate balance in market sentiment.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

GBP/USD edged down to 1.26195, a minor decrease of 0.03%. The currency pair is trading just below the pivot point of 1.26322, with resistance levels at 1.26635, 1.26902, and 1.27169 ahead.

Support is found lower at 1.25766, 1.25408, and 1.25062. The 50-day EMA at 1.26564 and the 200-day EMA at 1.26828 suggest a nearing cross-over, indicating potential shifts in market direction.

The pair’s current stance is bearish below 1.26322, yet a push above this threshold could signify a shift towards a bullish trend, highlighting a critical juncture for market sentiment.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.