EUR/USD, GBP/USD, DXY Price Forecast: DXY Dips Below 106; Market Correction Ahead?

Arslan Ali
Published: Apr 24, 2024, 07:39 GMT+00:00

Key Points:

  • EUR/USD sees slight uptick with PMI improvement; GBP/USD benefits from strong services sector growth.
  • Upcoming economic indicators like the German ifo Business Climate Index critical for Euro's path.
  • GBP/USD stability above pivot point of 1.2419 key to maintaining its current upward trajectory.
EUR/USD, GBP/USD, DXY Price Forecast: DXY Dips Below 106; Market Correction Ahead?

In this article:

Market Overview

For EUR/USD, the latest PMI data from Europe showed German Flash Manufacturing PMI at 42.2, a slight improvement from 41.9, yet indicating ongoing contraction in the sector. The German Flash Services PMI also rose to 53.3 from 50.6, reflecting some resilience in the service sector despite broader economic challenges.

For GBP/USD, the UK’s Flash Manufacturing PMI held steady at 50.3, suggesting stagnant sectoral growth. Conversely, the Services PMI experienced a significant increase to 54.9 from 53.0, indicating robust expansion, which could influence the monetary policy direction of the Bank of England.

Events Ahead

For EUR/USD, market participants are eyeing the German ifo Business Climate Index, expected at 88.9, up from 87.8, and a German 10-year Bond Auction with a yield forecast of 2.38%, previously 2.0%. These indicators will shed light on business sentiment and fiscal health in Europe.

For GBP/USD, the focus will shift to the UK’s CBI Industrial Order Expectations, anticipated at -16, slightly improved from -18, providing insights into the industrial outlook.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The Dollar Index today remains stable at 105.687 having a pivot point set at 105.927, which could dictate the future course. The Dollar Index faces immediate resistance at 106.536, with further hurdles at 107.097 and 107.608 potentially capping any upward moves. On the downside, initial support lies at 105.537, with subsequent levels at 105.221 and 104.901, which could provide fallback positions if the index starts to retreat.

The 50-Day Exponential Moving Average (EMA) is currently at 105.837, slightly above today’s level, indicating mild resistance. Meanwhile, the 200-Day EMA at 104.888 offers a broader support base below the current index level. The technical perspective suggests the Dollar Index might lean towards bearishness below its pivot of 105.927.

EUR/USD Technical Forecast

EUR/USD Price Chart - Source: Tradingview
EUR/USD Price Chart – Source: Tradingview

About the Author

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.

Did you find this article useful?