EUR/USD, GBP/USD, DXY Price Forecast: DXY at $104.25; Key PMI Data and GDP Ahead

By:

Arslan Ali

Published: Jul 22, 2024, 07:35 GMT+00:00

Key Points:

UK retail sales dropped 1.2% last Friday, indicating weakening consumer confidence.
UK Flash Manufacturing and Services PMI forecasts positive, potentially boosting GBP/USD.
U.S. economic data, including Flash PMI and GDP, to influence Dollar Index this week.

In this article:

EUR/USD

+0.01%

GBP/USD

+0.07%

Market Overview

Last Friday, UK retail sales fell sharply by 1.2%, against an expected 0.6% decline and a previous 2.9% rise. This significant drop indicates weakening consumer confidence and an economic slowdown, which affected the GBP/USD pair, which saw decreased trading activity.

Events Ahead

This week, Eurozone PMI data will be released, starting with the French Flash Manufacturing PMI forecasted at 45.7 (previous 45.4) and French Flash Services PMI at 49.7 (previous 49.6) on Wednesday.

Germany’s Flash Manufacturing PMI is expected at 44.1 (previous 43.5) and Services PMI at 53.3 (previous 53.1). These figures will provide insights into the health of the Eurozone economy, potentially impacting EUR/USD.

In the UK, the Flash Manufacturing PMI is forecasted at 51.1 (previous 50.9), and the Flash Services PMI at 52.5 (previous 52.1). Positive results could bolster the GBP/USD pair.

In the US, the Flash Manufacturing PMI is expected to hold steady at 51.6, while the Services PMI is forecasted to decrease to 54.5 from 55.3. Additionally, the Advance GDP is anticipated to rise to 1.9% from the previous 1.4%, and unemployment claims are expected to drop slightly to 239K from 243K.

Finally, on Friday, the Core PCE Price Index is forecasted to increase by 0.2% from 0.1%. These US data points will be crucial in determining the Dollar Index’s movement and the broader forex market sentiment.

US Dollar Index (DXY)

Dollar Index Price Chart – Source: Tradingview

The Dollar Index (DXY) is trading at $104.278, down 0.07%. On the 4-hour chart, the pivot point is $104.183. Immediate resistance levels are $104.423, $104.621, and $104.862. Immediate support is at $103.961, followed by $103.651 and $103.406.

Technical indicators show a mixed sentiment. The 50-day EMA is at $104.203, and the 200-day EMA is at $104.659. The outlook is bullish above $104.183, but a break below this pivot point could lead to a sharp selling trend.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is trading at $1.08820, up 0.10%. On the 4-hour chart, the pivot point is set at $1.09012. Immediate resistance levels are at $1.09189, $1.09448, and $1.09658. Immediate support is identified at $1.08759, followed by $1.08591 and $1.08435.

Technical indicators show a mixed outlook. The 50-day EMA is at $1.08970, while the 200-day EMA stands at $1.08480, suggesting potential support. The bearish sentiment persists below $1.09012. A break above this pivot point could trigger a bullish shift.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD is trading at $1.29181, up 0.09%. On the 4-hour chart, the pivot point is at $1.29405. Immediate resistance levels are $1.29666, $1.29908, and $1.30269. Immediate support is seen at $1.29025, followed by $1.28748 and $1.28459.

Technical indicators present a mixed picture. The 50-day EMA is at $1.29459, and the 200-day EMA is at $1.28640. The bearish outlook prevails below $1.29405, but a break above this level could shift the trend to bullish.

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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