EUR/USD, GBP/USD, DXY Forecast: GBP Sales Drop 2.3%; Eyes on US Consumer Sentiment

Arslan Ali
Updated: Jun 2, 2024, 10:09 GMT+00:00

Key Points:

  • G7 meetings continue, impacting global economic policies and market sentiment.
  • Key speeches from officials and Canadian retail sales data are closely watched.
  • US Core Durable Goods Orders expected to rise by 0.1%, influencing the Dollar Index.
EUR/USD, GBP/USD, DXY Forecast: GBP Sales Drop 2.3%; Eyes on US Consumer Sentiment

In this article:

Market Overview

The EUR/USD pair remained stable after the release of Germany’s Final GDP data, which showed a steady growth rate of 0.2% for the first quarter. This consistency in economic performance provided some support for the euro.

However, the GBP/USD faced pressure due to disappointing UK retail sales figures, which fell by 2.3% in April, significantly worse than the expected -0.5%.

This sharp decline suggests weaker consumer spending and potentially slower economic growth in the UK, weighing on the pound.

Events Ahead

Looking ahead,  the G7 meetings continue, with potential discussions on global economic policies that could influence market sentiment. In China, the Foreign Direct Investment data showed a significant year-to-date decline of 26.1%, potentially affecting global risk appetite and currency movements.

Later today, speeches from key officials, including German Buba President Nagel and SNB Chairman Jordan, will be closely watched. In North America, Canadian retail sales data is expected to show mixed results. Core retail sales are forecast to rise by 0.3%, while overall retail sales remain flat at 0.1%.

In the US, the focus will be on Core Durable Goods Orders, expected to rise by 0.1%, and Durable Goods Orders, anticipated to drop by 0.9%. Additionally, FOMC Member Waller’s speech and the Revised UoM Consumer Sentiment and Inflation Expectations will provide further insights into the US economic outlook.

The Dollar Index, currently at 104.76, could see volatility based on these upcoming data points and speeches.

US Dollar Index (DXY)

Dollar - index
Dollar – index

The Dollar Index is currently priced at $105.020, up 0.04%. Key levels to watch include the pivot point at $105.114. Immediate resistance is at $105.311, followed by $105.512 and $105.724. Immediate support is at $104.808, with further support at $104.626 and $104.395.

The 50-day EMA is at $104.826, and the 200-day EMA is at $104.988, indicating mixed signals. The outlook is bearish below $105.114; however, a break above this level could enhance the bullish bias.

EUR/USD Technical Forecast

EUR/USD Price Chart - Source: Tradingview
EUR/USD Price Chart – Source: Tradingview

About the Author

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.

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