EUR/USD, GBP/USD, DXY Price Forecast: DXY Bullish Above $103.80 Amid Key US/EU Data

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Updated: Mar 4, 2024, 06:49 GMT+00:00

Key Points:

US Dollar's mixed economic data hints at cautious optimism; ISM Manufacturing PMI falls to 47.8.
Eurozone's manufacturing sector struggles continue, Core CPI Flash Estimate rises to 3.1%, indicating inflation pressures.
GBP faces economic headwinds, yet EUR/USD and GBP/USD show bullish potential above key pivot points.

EUR/USD and GBP/USD Price Forecast: Analysis and Events Ahead

The US Dollar’s trajectory has been shaped by a mix of economic indicators: the ISM Manufacturing PMI reported a contraction with a figure of 47.8, against expectations set at 49.5. This was complemented by the Revised UoM Consumer Sentiment Index, which slightly improved to 76.9, marginally above forecasts.

Similarly, the Manufacturing Prices and Construction Spending presented a nuanced picture of the US economy, with spending dipping by -0.2% against a forecasted growth of 0.2%.

In Europe, Manufacturing PMI figures have shown a consistent theme of contraction across key economies—Spain’s PMI at 51.5, Italy at 48.7, France at 47.1, and Germany at a particularly low 42.5, all indicating the manufacturing sector’s struggles.

Notably, the Eurozone’s Core CPI Flash Estimate year-over-year rose to 3.1%, exceeding the anticipated 2.9%, hinting at inflationary pressures that might influence ECB’s future policy moves.

For the GBP, recent data highlighted economic challenges, with the Nationwide HPI month-over-month at 0.7%, and the Final Manufacturing PMI at 47.5, both reflecting underlying economic pressures.

Events Ahead:

Looking ahead, there are no immediate US data releases, but the market is bracing for significant reports on Friday, including the Non-Farm Employment Change expected at 190K and the Unemployment Rate projected to remain steady at 3.7%.

In Europe, upcoming data like the French Government Budget Balance and the Spanish Unemployment Change, alongside the Sentix Investor Confidence, are anticipated to further guide the EUR/USD and GBP/USD pairs.

US Dollar Index (DXY)

Dollar Index

The Dollar Index slightly declined by 0.03%, settling at 103.881. This minor drop places the index just above a pivotal level, marked by the pivot point at $103.82. Looking ahead, immediate resistance is identified at $104.24, with subsequent levels at $104.44 and $104.69 posing potential challenges for upward movement.

Conversely, support is found at $103.60, followed by $103.43 and $103.16, offering cushioning against further drops. The 50 EMA stands at $103.97, slightly above the current price, while the 200 EMA matches the pivot, at $103.82, suggesting a balanced view between short-term and long-term trends.

The Dollar Index displays a bullish inclination above the $103.82 mark, indicating potential for growth if it sustains above this crucial threshold.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD experienced a slight increase of 0.08%, reaching 1.08434. This uptick suggests a cautious optimism in the market. The pivot point for this currency pair is set at $1.0825, acting as a critical marker for future movements.

Resistance levels are established at $1.0864, $1.0887, and $1.0910, presenting potential hurdles for upward progression. On the flip side, support is identified at $1.0796, with additional levels at $1.0762 and $1.0731, which could provide a buffer against declines.

The 50 EMA at $1.0823 and the 200 EMA at $1.0883 offer insights into short-term and long-term trends, respectively. The EUR/USD shows bullish potential above the $1.0825 mark, indicating room for further gains if it remains above this key level.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair modestly climbed by 0.07%, marking the price at 1.26618. This slight uptick indicates a cautious optimism among traders. Key price levels to watch include a pivot point at $1.2646, suggesting potential shifts in market direction.

Immediate resistance is found at $1.2682, with further barriers at $1.2700 and $1.2728 that could limit upward movement. Conversely, support lies at $1.2618, followed by $1.2582 and $1.2549, which may halt declines. The 50 EMA at $1.2649 closely aligns with the current pivot, reinforcing its significance.

The GBP/USD exhibits a bullish stance above $1.2646, hinting at further potential gains if it maintains above this threshold.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Arslan Aliauthor

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.