EUR/USD, GBP/USD, DXY Price Forecast: DXY Eyes 105.20 Pivot; NFP Ahead

By:

Published: May 3, 2024, 08:00 GMT+00:00

Key Points:

French Industrial Production downturn contrasts expected growth, highlighting challenges in Eurozone manufacturing sector.
US employment data anticipates 238,000 new jobs, with unemployment steady at 3.8%.
Final Services PMI and ISM Services PMI to offer insights into US service sector performance.

Market Overview

The Euro saw mixed outcomes as French Industrial Production unexpectedly contracted by 0.3%, contrary to the anticipated 0.2% increase. This downturn contrasts with the previously reported slight growth, underscoring challenges in the Eurozone’s manufacturing sector.

Moreover, the French Government Budget Balance widened its deficit to €52.8 billion, significantly surpassing the previous €44.0 billion, suggesting increased fiscal pressures. Meanwhile, the Eurozone’s overall Unemployment Rate remained stable at 6.5%, aligning with forecasts and indicating steadiness in the job market.

Events Ahead

Key events ahead are the Average Hourly Earnings and Non-Farm Employment Change, with analysts expecting the creation of 238,000 jobs in the upcoming report, down from 303,000. The Unemployment Rate is projected to hold steady at 3.8%.

Additionally, the day will bring the release of the Final Services PMI and the ISM Services PMI, expected at 50.9 and 52.0 respectively, which could provide further insights into the service sector’s performance and broader economic trends.

Simultaneously, for the Eurozone, attention will turn to the Italian Monthly Unemployment Rate, anticipated to remain unchanged at 7.5%. Across the channel, the UK will report its Final Services PMI, projected to stay at 54.9, reflecting ongoing resilience in the British services sector.

US Dollar Index (DXY)

Dollar Index

Today’s technical analysis of the Dollar Index shows a slight downturn, with the index currently at 105.266, down by 0.09%. The critical pivot point is established at 105.214, marking a decisive level for future movements. Immediate resistance lies at 105.536, with more substantial barriers at 106.188 and 106.927.

Conversely, the index finds immediate support at 104.896, with further support levels at 104.515 and 104.035. Technical indicators such as the 50-day and 200-day Exponential Moving Averages are at 105.763 and 105.633 respectively, suggesting a closely contested area around the current price.

The outlook remains cautiously bullish above 105.214, but a dip below this threshold could precipitate a sharper selling trend.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

Today’s technical outlook for the EUR/USD shows a slight increase, with the pair trading at 1.07327, up by 0.07%. The currency faces a pivotal point at the pivot of 1.0736. Should it surpass this mark, immediate resistance levels are expected at 1.0764, followed by 1.0792 and 1.0821.

On the downside, should the Euro weaken, it will find initial support at 1.0696, with additional support at 1.0675 and 1.0650. Technical indicators, including the 50-day and 200-day Exponential Moving Averages, sit at 1.0705 and 1.0710 respectively, suggesting a narrow band around the pivot.

The outlook indicates a bearish trend below 1.0736, while a move above could suggest a strengthening Euro.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

In today’s session, the GBP/USD pair has edged up by 0.13% to trade at 1.25499, demonstrating a modest uptrend. The pivot point is set at 1.25203, with the pound showing potential for further gains if it maintains above this level. Resistance points are identified at 1.25703, 1.26182, and 1.26649, marking the thresholds for bullish advances.

Conversely, should the pair retreat, it will encounter support at 1.24669, followed by 1.24230 and 1.23797, which could stabilize declines. The 50-day and 200-day Exponential Moving Averages, at 1.25154 and 1.25072 respectively, underline a narrow trading range, reinforcing the significance of the pivot point.

The analysis suggests a bullish stance above 1.25203, whereas falling below this mark may trigger a notable selling 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.

Editors’ Picks