EUR/USD, GBP/USD, DXY Forecast: DXY Rises to 104.20; Eyes on ADP Employment Data

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Published: Jun 5, 2024, 07:25 GMT+00:00

Key Points:

French Government Budget Balance deficit widened to -91.6 billion euros, worse than the previous -52.8 billion euros.
German Unemployment Change rose by 25K, significantly above the forecast of 7K, weighing on the Euro.
Dollar Index rose to 104.201, up 0.08%, supported by expectations of strong ADP Non-Farm Employment data.

EUR/USD, GBP/USD, DXY Forecast: DXY Rises to 104.20; Eyes on ADP Employment Data

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Market Overview

On June 4, the French Government Budget Balance revealed a deficit of -91.6 billion euros, significantly worse than the previous -52.8 billion euros. Spain’s Unemployment Change showed an improvement, with a decrease of 58.7K, slightly better than expected.

However, German Unemployment Change reported an increase of 25K, far exceeding the forecast of 7K.

In the US, the Dollar Index rose to 104.201, up 0.08%, supported by strong economic data. This includes the ADP Non-Farm Employment Change, which will be closely watched for its forecast of 173K jobs added, down from the previous 192K.

Events Ahead

Looking ahead to June 5, the Eurozone will release several important indicators, including the Italian Services PMI, forecasted at 54.4, and the French Final Services PMI, expected to remain at 49.4. The German Final Services PMI and the overall Eurozone Final Services PMI are anticipated to hold steady at 53.9 and 53.3, respectively. In the UK, the Final Services PMI is projected at 52.9.

A larger-than-expected French budget deficit and rising German unemployment have weighed on the Euro, although better Spanish unemployment data provided some relief.

In the US, significant data points include the ADP Non-Farm Employment Change, expected to show an increase of 173K jobs. The Final Services PMI and ISM Services PMI are forecasted at 54.8 and 51.0, respectively. The GBP/USD pair stands at $1.27754, down 0.01%, reflecting cautious trading ahead of significant UK and US data releases.

US Dollar Index (DXY)

Dollar Index

The Dollar Index is trading at $104.201, up 0.08% on the four-hour chart. Key price levels include a pivot point at $104.038. The immediate resistance is at $104.340, with further resistances at $104.529 and $104.763. On the downside, immediate support is at $103.887, followed by $103.730 and $103.571.

Technical indicators show the 50-Day Exponential Moving Average (EMA) at $104.529 and the 200-Day EMA at $104.843. The outlook remains bullish, above the pivot point of $104.038. However, a break below this level could trigger significant selling pressure, emphasizing the importance of maintaining support at this threshold.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair is trading at $1.08816, down 0.02% on the four-hour chart. Key price levels include a pivot point at $1.08823. The immediate resistance is at $1.08956, with further resistances at $1.09162 and $1.09323. On the downside, immediate support is at $1.08614, followed by $1.08467 and $1.08282.

Technical indicators show the 50-Day Exponential Moving Average (EMA) at $1.08564 and the 200-Day EMA at $1.08139. The outlook remains bullish above the pivot point of $1.08823. However, a break below this level could trigger significant selling pressure, emphasizing the importance of maintaining support at this threshold.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair is trading at $1.27754, down 0.01% on the four-hour chart. Key price levels include a pivot point at $1.2771. The immediate resistance is at $1.2789, with further resistances at $1.2818 and $1.2841. On the downside, immediate support is at $1.2756, followed by $1.2742 and $1.2721.

Technical indicators show the 50-Day Exponential Moving Average (EMA) at $1.2744 and the 200-Day EMA at $1.2656. The outlook remains bullish above the pivot point of $1.2771. However, a break below this level could trigger significant selling pressure, emphasizing the importance of maintaining support at this threshold.

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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