EUR/USD, GBP/USD, DXY Price Forecast: DXY Falls Below 105.50; Major Sell-off Looming?

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Published: Jul 1, 2024, 06:53 GMT+00:00

Key Points:

Core PCE Price Index for the U.S. increased by 0.1%, meeting expectations but below previous 0.3%.
Chicago PMI rose to 47.4 from 39.7, indicating improving U.S. business conditions.
Germany's Preliminary CPI is forecasted to rise by 0.2%, potentially strengthening the euro.

EUR/USD, GBP/USD, DXY Price Forecast: DXY Falls Below 105.50; Major Sell-off Looming?

Market Overview

On Friday, the Core PCE Price Index for the U.S. showed a modest 0.1% increase, matching expectations but lower than the previous 0.3%.

The Chicago PMI surprised markets with a rise to 47.4 from 39.7, indicating improving business conditions. Revised UoM Consumer Sentiment also showed an uptick to 68.2, above the previous 65.6.

In Europe, the French Preliminary CPI remained steady at 0.1%, while Spain’s Flash CPI decreased slightly to 3.4% from 3.6%, aligning with forecasts. These data points had mixed impacts on the EUR/USD pair, which saw cautious trading.

Events Ahead

Looking forward to July 1, Germany’s Preliminary CPI is forecasted to rise by 0.2%, potentially strengthening the euro if it meets or exceeds expectations.

In the U.S., the Final Manufacturing PMI is anticipated to hold at 51.7, and the ISM Manufacturing PMI is forecasted to improve to 49.2.

These figures could support the Dollar Index, currently at $105.605, if they indicate a stronger manufacturing sector.

ECB President Lagarde’s speech will be closely watched for insights into future monetary policy, which could further influence the EUR/USD.

US Dollar Index (DXY)

Dollar Index Price Chart – Source: Tradingview

The Dollar Index is trading at $105.605, reflecting a 0.27% decline. The pivot point is positioned at $105.541. Key resistance levels are identified at $105.782, $105.958, and $106.134. On the support side, levels are set at $105.371, $105.206, and $105.052.

The 50-day Exponential Moving Average (EMA) stands at $105.791, while the 200-day EMA is at $105.444. The market sentiment is bullish above the pivot point of $105.541. A break below this level could indicate a sharp selling trend.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair is trading at $1.07557, reflecting a 0.44% increase. On the 4-hour chart, the pivot point is set at $1.07430. Immediate resistance levels are identified at $1.07621, $1.07815, and $1.07975. On the downside, immediate support is at $1.07251, followed by $1.07059 and $1.06564.

The 50-day Exponential Moving Average (EMA) stands at $1.07132, while the 200-day EMA is at $1.07397. These levels indicate a bullish sentiment above $1.07430, suggesting that a break below this pivot could trigger a sharp selling trend.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair is currently trading at $1.26584, showing a 0.13% increase. Key levels to watch include the pivot point at $1.2652. Immediate resistance levels are at $1.2671, $1.2701, and $1.2732. On the support side, levels are identified at $1.2631, $1.2612, and $1.2587.

The 50-day Exponential Moving Average (EMA) is positioned at $1.2652, closely aligning with the pivot point, while the 200-day EMA stands at $1.2685. The market sentiment remains bullish above $1.2652, with a break below this level potentially leading to a sharp selling trend.

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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