EUR/USD, GBP/USD, DXY Price Forecast: DXY Correction to 104.15 Signals More Selling

By:

Published: Mar 26, 2024, 08:02 UTC

Key Points:

New Home Sales in the US slightly missed forecasts at 662K, suggesting a cautious optimism in the housing market.
In Europe, the German GfK Consumer Climate dipped to -27.4, reflecting a more pessimistic sentiment than expected.
The GBP showed resilience with CBI Realized Sales at 2, indicating an optimistic retail environment in the UK despite mixed signals.

Market Overview

Recently, the USD saw New Home Sales figures slightly miss expectations, with a recording of 662K against the forecasted 675K. In Europe, the German GfK Consumer Climate index indicated a slight dip to -27.4, reflecting a marginally more pessimistic outlook than anticipated.

The GBP experienced a mixed bag with CBI Realized Sales coming in at 2, better than the predicted -13, suggesting a slightly more optimistic retail environment in the UK.

Events Ahead

Looking forward, significant events are set to shape market sentiment and movement. The USD is bracing for a series of data releases including Core Durable Goods Orders month-over-month expected at 0.4%, and the Durable Goods Orders month-over-month forecasted to show a 1.2% increase. Additionally, the S&P/CS Composite-20 HPI year-over-year is anticipated at 6.6%, with the Home Price Index month-over-month forecasted at a modest 0.2% growth.

Consumer confidence and manufacturing indices will also provide insights into the economic outlook with the CB Consumer Confidence index expected at 106.9 and the Richmond Manufacturing Index projected at -5.

For the EUR, attention will be on the German 10-year Bond Auction which might influence the EUR/USD pair’s performance.

US Dollar Index (DXY)

Dollar Index

The Dollar Index indicates a minor decrease of 0.01%, trading at 104.159. Positioned slightly below its pivot point of 104.497, the market demonstrates potential for upward movement. Resistance levels are identified at 104.736, 104.978, and 105.277, indicating possible points of contention for further gains.

On the downside, support is observed at 103.989, with additional levels at 103.675 and 103.378 offering protection against declines. The 50-day and 200-day Exponential Moving Averages (EMAs) at 103.862 and 103.657, respectively, underscore a bullish undercurrent.

The current sentiment for the Dollar Index is bullish above 104.497, yet a descent below this crucial marker could prompt a pronounced sell-off.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

Today, the EUR/USD pair edged up by 0.01%, marking a price of 1.08475. Hovering just below the pivot point of 1.0855, the currency pair shows potential for either direction. Immediate resistance levels are found at 1.0888, 1.0912, and 1.0942, setting the stage for upward momentum.

Support levels are positioned at 1.0835, followed by 1.0802 and 1.0766, which could safeguard against further declines. The 50-day and 200-day Exponential Moving Averages (EMAs), almost identical at 1.0861 and 1.0860 respectively, suggest a tightly contested market.

The overall trend leans towards bearish below 1.0855, but a move above this threshold could tilt the balance towards a bullish outlook.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

GBP/USD shows a marginal increase of 0.03%, with the currency pair trading at 1.26473. It’s positioned slightly below the pivot point of 1.2685, suggesting a tight market sentiment. Resistance levels are established at 1.2748, 1.2805, and 1.2841, indicating potential hurdles for upward price movement.

Conversely, support is seen at 1.2625, with subsequent levels at 1.2576 and 1.2536 potentially cushioning any downside. The 50-day and 200-day Exponential Moving Averages (EMAs), at 1.2688 and 1.2694 respectively, hover near the pivot, likely to act as a ceiling and prompt a selling trend.

The outlook for GBP/USD remains bearish below 1.2685, but crossing above this point could signal a shift towards bullish territory.

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.