EUR/USD, GBP/USD, DXY Price Forecast: DXY Bullish Over $105.48; BOE Rate Ahead

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Published: May 9, 2024, 07:24 GMT+00:00

Key Points:

Forex markets quiet due to Ascension Day; GBP reacts mildly to -5% RICS House Price Balance drop.
Upcoming BoE reports and unchanged Official Bank Rate at 5.25% critical for GBP's future direction.
USD focus on domestic health with Unemployment Claims expected at 212K and upcoming 30-year Bond Auction.

EUR/USD, GBP/USD, DXY Price Forecast: DXY Bullish Over $105.48; BOE Rate Ahead

Market Overview

In the latest market activity, the forex market faced a relatively quiet trading environment due to the closure of banks in observance of Ascension Day. Meanwhile, the GBP saw a modest impact from the RICS House Price Balance, which reported a -5% rate, indicating a slight deterioration in the UK housing market compared to the previous -2%.

Events Ahead

For the GBP, critical events include the Bank of England’s Monetary Policy Report and the Monetary Policy Summary, both scheduled for 1:00 pm. These releases are crucial as they provide insights into the economic outlook and monetary policy direction, with the MPC Official Bank Rate Votes expected to remain unchanged at 0-0-9.

Additionally, the Official Bank Rate is anticipated to stay at 5.25%, a decision that will be closely watched by traders.

For the USD, the focus shifts to domestic economic health with the release of Unemployment Claims at 5:30 pm, expected at 212K, slightly up from the previous 208K. Furthermore, Mortgage Delinquencies and the 30-year Bond Auction data are due later in the day.

US Dollar Index (DXY)

Dollar Index

The Dollar Index currently trades at $105.617, marking a slight increase of 0.11%. Positioned just above both the 50-day and 200-day Exponential Moving Averages, set at $105.425 and $105.500. Today’s pivot point is established at $105.480, which serves as a critical juncture for the index.

Immediate resistances are identified at $105.886, $106.146, and $106.483. These levels could restrict upward movements unless surpassed. Conversely, supports are located at $105.223, $104.938, and $104.640, safeguarding against potential declines. Given the index’s stance just above its pivot and moving averages, maintaining above $105.480 may favour further bullish behaviour.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is trading at $1.07388 today, reflecting a modest decline of 0.09%. The 50-day and 200-day Exponential Moving Averages, which are currently at $1.07476 and $1.07287, respectively, mark the pivot point of $1.07382 within a constrained range. This positioning indicates a potential tipping point for future price movements.

Key resistance levels are set at $1.07778, $1.08124, and $1.08533, which could cap upward progress. Support levels are identified at $1.06951, $1.06512, and $1.06119, crucial for preventing further declines. However, a break above $1.07382 may signal a move towards a more bullish stance.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

GBP/USD pair is trading at $1.24837, registering a slight decline of 0.11%. The pair is currently hovering just below the pivot point of $1.25017, situated near both the 50-day and 200-day Exponential Moving Averages, which stand at $1.25162 and $1.25153, respectively. This convergence suggests a critical juncture for the currency pair’s short-term direction.

Resistance levels are set at $1.25378, $1.25839, and $1.26318, which could serve as ceilings for any upward movement. On the downside, support is found at $1.24663, with further floors at $1.24230 and $1.23797 that could stabilize declines. Given the GBP/USD’s proximity to key moving averages and the pivot point, movements above $1.25017 may signal a shift towards a bullish trend.

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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