EUR/USD, GBP/USD, DXY Forecast: DXY Gains Support Near 104; Ready for a Bounce

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Published: Jun 4, 2024, 06:43 GMT+00:00

Key Points:

Spanish Unemployment Change expected to improve to -55.4K from -60.5K, potentially supporting the euro.
JOLTS Job Openings in the US forecasted at 8.37M, down from 8.49M, possibly weakening the dollar.
Factory Orders expected to rise by 0.7%, below the previous 0.8%, and RCM/TIPP Economic Optimism forecasted at 45.2 from 41.8.

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Market Overview

On Monday, the Spanish Manufacturing PMI exceeded expectations, coming in at 54.0 against a forecast of 52.5, giving the euro a boost. Conversely, the Italian Manufacturing PMI disappointed at 45.6, below the expected 47.9, applying downward pressure on the euro.

The UK’s Final Manufacturing PMI posted a slight miss at 51.2 versus 51.3, keeping the pound relatively stable. In the US, the ISM Manufacturing PMI fell to 48.7 from 49.8, indicating a deeper contraction and weakening the Dollar Index, which closed at 104.076, down 0.09%.

Events Ahead

Looking forward, the Spanish Unemployment Change is expected to show an improvement at -55.4K, compared to the previous -60.5K, which could support the euro. German Unemployment Change is forecasted at 7K, down from 10K, potentially bolstering the euro further. In the US, the JOLTS Job Openings are forecasted at 8.37M, slightly down from 8.49M, which could add to the dollar’s weakness if the figure disappoints.

Factory Orders are expected to rise by 0.7%, just below the prior 0.8%, and the RCM/TIPP Economic Optimism Index is forecasted at 45.2, up from 41.8, potentially providing some support to the dollar if the data comes in strong.

Strong European data could strengthen the EUR/USD pair, while any disappointing US figures might further pressure the Dollar Index, supporting both the euro and the pound.

US Dollar Index (DXY)

Dollar Index

The Dollar Index (DXY) is trading at $104.076, up 0.03% in the 4-hour timeframe. The pivot point at $103.996 is critical, serving as a key support level. Immediate resistance is identified at $104.179, followed by $104.289 and $104.469.

On the downside, immediate support lies at $103.887, with further levels at $103.730 and $103.571. The 50-day Exponential Moving Average (EMA) is at $104.549, while the 200-day EMA stands at $104.788, indicating a bullish trend above these averages.

The technical outlook remains bullish above the pivot point of $103.996, but a break below this level could trigger a sharp selling trend.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is trading at $1.09068, up 0.03% in the 4-hour timeframe. The pivot point at $1.09161 is crucial, acting as a key benchmark for price movements. Immediate resistance is identified at $1.09323, followed by $1.09527 and $1.09707.

On the downside, immediate support lies at $1.08954, with further support at $1.08822 and $1.08615. The 50-day Exponential Moving Average (EMA) is at $1.08569, while the 200-day EMA stands at $1.08315.

The outlook remains bearish below the pivot point of $1.09161, but a break above this level could shift the bias towards a more bullish trend.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD is trading at $1.28111, up 0.03% in the 4-hour timeframe. The pivot point at $1.28180 is critical, serving as a key benchmark for price movements. Immediate resistance is identified at $1.28413, followed by $1.28674 and $1.28879.

On the downside, immediate support lies at $1.27890, with further levels at $1.27716 and $1.27416. The 50-day Exponential Moving Average (EMA) is at $1.27498, while the 200-day EMA stands at $1.26933.

The outlook remains bearish below the pivot point of $1.28180, but a break above this level could shift the bias towards a more bullish trend.

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

About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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