EUR/USD, GBP/USD, DXY Price Forecast: Dollar Dips to $103.68, More Sell-off Ahead?

Arslan Ali
Updated: Feb 27, 2024, 08:31 GMT+00:00

Key Points:

  • US Dollar Index dips to $103.68 amid housing data miss; Eurozone, UK data in focus.
  • Upcoming US Durable Goods data, Eurozone M3 Money Supply, and UK MPC speech eyed.
  • Dollar shows bearish tilt under $103.86 pivot; EUR/USD, GBP/USD bullish above key levels.
EUR/USD, GBP/USD, DXY Price Forecast: Dollar Dips to $103.68, More Sell-off Ahead?

In this article:

US Dollar Dips, Eyes on Eurozone and UK Indicators

The US Dollar Index has seen a subtle dip, now standing at $103.68, down by nearly 0.10%. The backdrop is set by recent data: US New Home Sales slightly missed forecasts at 661K against an expectation of 680K, signaling potential headwinds for the dollar.

For the Eurozone, the German GfK Consumer Climate held steady at -29.0, aligning with expectations but highlighting continued consumer caution. In the UK, inflationary pressures as measured by the BRC Shop Price Index year-on-year have shown a slight easing to 2.5% from 2.9%.

Events Ahead:

Looking forward, the market braces for impactful data: US Durable Goods Orders are projected to decline by -4.9%, a stark contrast to the previous period’s 0.0% reading.

Meanwhile, Core Durable Goods Orders could see a slight uptick of 0.2%, compared to an anticipated 0.5%. The S&P/CS Composite-20 HPI year-on-year is expected to show a deceleration to 6.0% from 5.4%, reflecting a cooling housing market.

Additionally, the CB Consumer Confidence index might remain unchanged at 114.8, while the Richmond Manufacturing Index is forecasted to improve to -4 from -15, potentially offering a glimpse of resilience in the manufacturing sector.

For Eurozone, attention shifts to the M3 Money Supply year-on-year, anticipated at a modest increase of 0.3% from 0.1%, and Private Loans year-on-year expected to grow by 0.4%, slightly up from 0.3%.

For UK, the market’s focus will soon turn to MPC Member Ramsden’s upcoming speech, which could offer insights into the Bank of England’s monetary policy outlook and its implications for the GBP/USD pair.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The US Dollar Index’s pivot point stands at $103.86, with direction appears to be bearish. Resistance levels are plotted at $104.15, $104.44, and $104.69, delineating potential hurdles for upward progression. Support figures, identified at $103.44, $103.17, and $102.91, play a crucial role in underpinning the Dollar’s value.

The technical landscape, underscored by the 50-day and 200-day Exponential Moving Averages at $104.01 and $103.78 respectively, suggests a balanced momentum.

The analysis leans towards a bearish sentiment below the pivot point of $103.86, indicating a cautious outlook on the Dollar’s trajectory.

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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