EUR/USD, GBP/USD, DXY Price Forecast: DXY at 105.31; Further Declines Expected?

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Published: May 13, 2024, 08:01 GMT+00:00

Key Points:

Fed members' comments may sway U.S. dollar and shape future monetary policy.
U.S. mortgage delinquency rate at 3.88% hints at economic pressures.
Critical U.S. inflation data due Tuesday, pivotal for Fed rate decisions.

EUR/USD, GBP/USD, DXY Price Forecast: DXY at 105.31; Further Declines Expected?

Market Overview

This week kicks off with a a significant focus on the U.S. dollar, influenced by recent remarks from Federal Reserve members Jefferson and Mester. Both expressed perspectives, that will likely impact upcoming monetary policy decisions.

Additionally, mortgage delinquencies in the U.S. stand at 3.88%, a figure that reflects broader economic undercurrents and could influence Federal Reserve strategies.

Events Ahead

For the U.S. dollar, attention is centred on inflation data, with the Producer Price Index (PPI) expected to rise by 0.3% month-over-month and the Core PPI anticipated to remain steady at 0.2%. These figures are due on Tuesday and will be critical as they provide insights into inflationary pressures that might affect the Fed’s interest rate decisions.

The Euro will face its own tests with the release of the EU Economic Forecasts and discussions during the Eurogroup meetings. For the British pound, Tuesday brings important labor market data, with the Claimant Count Change expected at 13.9K and the Unemployment Rate forecasted at 4.3%. The Average Earnings Index is also on the docket, anticipated at 5.3%, a slight decline from the previous figure, indicating potential shifts in wage inflation pressures in the UK.

US Dollar Index (DXY)

Dollar Index

The Dollar Index is currently trading at 105.305, with the pivot point for today at 105.403. Should the index sustain above this mark, it could encounter immediate resistances at 105.660, 105.893, and 106.146, potentially steering a bullish trend.

Conversely, a slip below this pivot might see the index testing support levels at 105.143 and 104.882 and extending down to 104.538, suggesting a bearish shift. The 50-day and 200-day Exponential Moving Averages are placed closely at 105.422 and 105.233, respectively, indicating a consolidation phase near current levels.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair is showing modest gains today, currently trading at $1.07784, marking a slight increase of 0.03%. The forex market’s focus is on the technical levels that are likely to dictate short-term price movements. The immediate pivot point for the pair is set at $1.07549, acting as a crucial juncture; prices above this level could foster a bullish sentiment, while a decline below could trigger a bearish shift.

Key resistance levels are identified at $1.08115, $1.08464, and $1.08816, challenging potential upward moves. Conversely, support levels are positioned at $1.07240, $1.06897, and $1.06506, where dips might find a floor. The 50-day and 200-day Exponential Moving Averages (EMA), both hovering just below the pivot at around $1.07500, reinforce the significance of current levels.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: TradingView

The GBP/USD pair is currently experiencing slight gains, trading at $1.25241, a modest increase of 0.04%. Today’s trading revolves around crucial technical levels that might indicate the pair’s short-term trajectory.

The pivot point is established at $1.25046, suggesting that holding above this level could maintain bullish momentum, while breaking below could lead to a sell-off.

Resistance levels are set at $1.25676, $1.26328, and $1.26965, which will challenge the pair’s ability to ascend. Support is found at $1.24459, followed by $1.24032 and $1.23475, acting as potential buffers against downward movements.

The 50-day and 200-day Exponential Moving Averages are at $1.25148 and $1.25406, respectively, slightly above and below the current price, hinting at a balanced market condition.

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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