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EUR/USD, GBP/USD, DXY Forecast: Will US Data Swing Dollar from 105.50?

By:
Arslan Ali
Updated: Jun 17, 2024, 08:05 GMT+00:00

Key Points:

  • Eurozone trade surplus beats expectations, while UK inflation expectations cool.
  • US dollar finds support in weaker import prices and falling consumer sentiment.
  • G7 meetings and US manufacturing data are key events to watch today.
EUR/USD, GBP/USD, DXY Forecast: Will US Data Swing Dollar from 105.50?

In this article:

Market Overview

Last Friday was a mixed bag for the major currencies. European data mostly surprised to the upside, with the Eurozone trade balance widening to €19.4 billion, beating expectations of €17.2 billion. However, the Italian trade balance slightly missed forecasts, coming in at €4.81 billion instead of €4.30 billion.

The pound took a hit as UK consumer inflation expectations cooled to 2.8%, fueling concerns about the Bank of England’s tightening path. Meanwhile, the US dollar saw a boost from weaker-than-expected import prices (-0.4%) and a drop in consumer sentiment to a six-month low of 65.6.

Events Ahead

Today, the market’s focus will shift towards the G7 meetings and the release of the US Empire State Manufacturing Index. With expectations set at -15.6, any positive surprise could further bolster the dollar.

Traders will be closely watching how the G7 discussions unfold, as any hints about trade policies or economic cooperation could impact currency markets.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The Dollar Index rose 0.30% on Monday, reaching $105.517. Despite this uptick, the technical outlook remains bearish below the immediate resistance level of $105.816. A decisive move above this level could signal a shift in momentum, potentially pushing the index towards $106.004 and $106.189.

However, if the index fails to break through this resistance, it could retreat towards the pivot point at $105.433 and potentially further down to $105.216 and $105.031.

The 50-day EMA currently sits below the 200-day EMA, suggesting a potential bearish crossover. Traders should closely monitor the $105.816 level for a breakout or breakdown.

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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