EUR/USD and GBP/USD Price Forecast: Euro Stumbles to 1.0948, Pound to 1.2747 as Data Diverges

Highlights

1. • EUR/USD and GBP/USD retreat against a steadfast Dollar, signaling cautious market sentiment.
   • French consumer spending beats expectations, while UK GDP exceeds forecasts amidst shrinking construction output.
   • Rightmove HPI suggests UK housing market resilience against the backdrop of static US inflation indicators.

Currency Shakeup: Euro, Pound Dip as Dollar Holds Steady

In the currency markets, the Euro and Pound yielded ground to the Dollar, with EUR/USD down 0.21% to 1.0948 and GBP/USD decreasing by 0.10% to 1.2747 on Friday. The U.S. Dollar Index showed little movement, slightly down by 0.01% to 101.95.

Economic data revealed a mixed landscape: France’s consumer spending exceeded forecasts, countering a grim prediction with a 0.7% rise, while its CPI matched the expected 0.1%.

In the UK, GDP modestly outperformed at 0.3%, but construction output shrank by 0.2%. The trade deficit widened to 14.2 billion pounds, yet industrial and manufacturing sectors expanded.

The Rightmove HPI’s 1.3% increase on Monday suggested resilience in the UK housing sector. Conversely, stagnant U.S. Core PPI and PPI readings pointed to tempered inflation, setting a somber backdrop.

Events Ahead

Looking forward, the Eurozone’s trade balance and production data remain in focus, potentially impacting the EUR/USD trajectory, while the U.S. calendar remains sparse, drawing attention to the global stage at the WEF Annual Meetings.

US Dollar Index (DXY)

The U.S. Dollar Index (DXY) is exhibiting consolidation within a symmetrical triangle pattern, typically indicative of a market in equilibrium awaiting a breakout. Trading at 102.399, the index is oscillating between the 50 EMA of 102.304 and the 200 EMA of 102.721.

The narrow range suggests an imminent volatility expansion, with the potential to breach either the pattern’s upper or lower boundaries, leading to a decisive trend direction.

EUR/USD Technical Forecast

The EUR/USD pair, in its latest 4-hour chart analysis, shows a rise, trading up by 0.8% at $1.0959. The pair teeters around a pivot point of $1.0962, with immediate resistance looming at $1.1016. Further resistance is charted at $1.1081 and $1.1137. On the downside, support forms at $1.0898, with additional cushions at $1.0828 and $1.0755.

The 50-day and 200-day Exponential Moving Averages are currently at $1.0960 and $1.0921, respectively, suggesting a potential bullish bias as the pair consolidates in a narrow range between the 1.1010 and 1.0900 marks.

With the pair holding above the 1.0900 threshold, the outlook remains bullish, indicating a potential challenge to the upper resistance levels in the short term.

GBP/USD Technical Forecast

The GBPUSD pair has edged down by 0.3% to $1.2749 as of the latest session. In the 4-hour chart, we observe the currency trading just below the pivot point of $1.2752. Resistance is mapped out at $1.2783, with subsequent levels at $1.2827 and $1.2877.

On the support side, the first level is at $1.2689, followed by $1.2649 and $1.2608. The 50-day and 200-day Exponential Moving Averages are at $1.2728 and $1.2647, respectively, indicating a potential pivot zone where traders might look for directional cues.

The GBP/USD is currently consolidating within the 1.2780 to 1.2725 range, with a breakout on either side likely to set the stage for the next significant price movement.

Presently, the trend for the pair is bullish above the $1.2752 mark. If this level is maintained, we may anticipate a challenge to higher resistances in the near term.