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EUR/USD, GBP/USD, DXY Price Forecast: DXY Consolidates – Breakout Imminent?
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Key Points:
- EUR/USD faces pressure as German WPI falls short, indicating weaker inflation.
- Dollar Index holds steady at 103.15 amid mixed U.S. economic signals.
- GBP/USD eyes key data; upward momentum likely if it stays above $1.2776.
In this article:
On August 12th, the EUR/USD saw limited movement as Germany’s Wholesale Price Index (WPI) came in lower than expected at -0.3%, compared to the forecast of 0.2%. This decline indicates weaker inflationary pressures, which could weigh on the euro.
Meanwhile, in the U.S., the Cleveland Fed Inflation Expectations rose to 3.8%, reflecting continued concerns about inflation.
The U.S. Federal Budget Balance also showed a significant deficit of -$243.7 billion, compared to the previous -$66.0 billion, highlighting ongoing fiscal challenges. These mixed signals contributed to a cautious market sentiment, with the Dollar Index holding around 103.15.
Events Ahead
Looking forward, the GBP/USD pair is in focus as the U.K. releases key employment data on August 13th. The Claimant Count Change is expected to rise sharply to 135K, signaling potential weakness in the labor market.
Additionally, the Average Earnings Index is forecasted to drop to 4.5%, down from 4.6%, which may weigh on the pound. In the eurozone, Germany’s ZEW Economic Sentiment is expected to decline to 32.6, indicating growing pessimism.
In the U.S., traders will be watching the Core PPI data, expected at 0.2%, which could influence the Dollar Index and broader market trends.
On the downside, support is found at $103.034, with additional support at $102.708 and $102.163. The 50-day EMA is at $103.325, just above the current price, while the 200-day EMA stands at $104.088.
Holding above $103.309 keeps the bullish outlook intact, but a break below could lead to a sharper decline. Bullish above $103.309, with potential selling pressure if it breaks below.
EUR/USD Technical Forecast
The EUR/USD is currently trading at $1.09280, up 0.05% on the day. On the 4-hour chart, the pair has completed a 50% Fibonacci retracement around the $1.0893 level. The recent formation of candles above this level has triggered a bullish bounce, pushing prices above the 38.2% Fibonacci retracement at $1.0920.
Both the 50-day and 200-day EMAs, at $1.09070 and $1.08600, respectively, support a continued bullish trend.
Today, $1.0920 acts as a critical pivot point; staying above this level could reinforce the bullish momentum, while a break below might signal a potential reversal. Bearish below $1.09211; a break above could signal further bullish momentum.
GBP/USD Technical Forecast
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.
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