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EUR/USD, GBP/USD, DXY Forecast: ECB Rate Holds, USD Flat at 104.05 Pre-NFP
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Key Points:
- ECB maintained the Main Refinancing Rate at 4.25%, stabilizing the euro.
- Halifax HPI for the UK showed a 0.1% decline, adding pressure on GBP/USD.
- US unemployment claims rose to 229K, indicating potential labor market weakness.
Yesterday, the European Central Bank (ECB) maintained the Main Refinancing Rate at 4.25%, in line with expectations, which kept the euro relatively stable. The latest data from Germany showed a mixed economic picture, with industrial production declining by 0.1% against a forecast of 0.1% growth and the trade balance slightly below expectations at €22.1 billion. Additionally, France reported a wider trade deficit of €7.6 billion, compared to the expected €5.4 billion.
The GBP/USD pair is currently at $1.27950, down by 0.03%. The Halifax House Price Index (HPI) for the UK showed a minor decline of 0.1%, against an expected rise of 0.3%, adding pressure on the pound.
The Dollar Index (DXY) is relatively flat at 104.056, with recent unemployment claims in the US rising to 229K, above the forecast of 220K, indicating potential weakness in the labor market.
Events Ahead
For the euro, the Final Employment Change and Revised GDP figures are expected to be stable at 0.3% quarterly. The European Parliamentary Elections will also be closely watched, potentially influencing the euro.
For the US dollar, the focus will be on the upcoming Non-Farm Employment Change, expected at 182K, and the Unemployment Rate, forecasted to remain steady at 3.9%.
Additionally, Average Hourly Earnings are projected to increase by 0.3%, slightly above the previous 0.2%. These figures will be crucial in determining the Federal Reserve’s future policy direction.
The Dollar Index (DXY) is trading at $104.056, showing no significant change. The pivot point is $104.121, marking a critical level for today’s session. Immediate resistance is at $104.291, with further resistance levels at $104.459 and $104.709.
On the downside, immediate support is found at $103.887, followed by $103.730 and $103.571.
Technical indicators show the 50-Day Exponential Moving Average (EMA) at $104.389 and the 200-Day EMA at $104.764, suggesting a bearish trend below the pivot point. A break above $104.121 could indicate a shift to a more bullish bias.
EUR/USD Technical Forecast
The EUR/USD is trading at $1.08949, reflecting a modest increase of 0.04% on the four-hour chart. The pivot point is at $1.08815, serving as a crucial level for today’s trading. Immediate resistance is observed at $1.09162, with further resistance at $1.09323 and $1.09517.
On the downside, immediate support is found at $1.08601, followed by $1.08398 and $1.08184.
Technical indicators show the 50-Day Exponential Moving Average (EMA) at $1.08667 and the 200-Day EMA at $1.08217, suggesting a bullish outlook above the pivot point. A break below $1.08815 could trigger a sharp selling trend.
GBP/USD Technical Forecast
The GBP/USD pair is currently trading at $1.27950, reflecting a slight decrease. The pivot point is $1.2789, serving as a crucial level for today’s trading. Immediate resistance levels are $1.2818, $1.2836, and $1.2856.
On the downside, immediate support is at $1.2771, with further support at $1.2756 and $1.2742. Technical indicators show the 50-Day Exponential Moving Average (EMA) at $1.2761 and the 200-Day EMA at $1.2671, indicating a bullish trend above the pivot point.
A break below $1.2789 could signal a sharp selling 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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