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EUR/USD, GBP/USD, DXY Price Forecast: DXY Falls to $105.85; Further Declines Expected?

By:
Arslan Ali
Published: Apr 18, 2024, 07:51 GMT+00:00

Key Points:

  • EUR/USD holds above pivot, showing mild bullish signs amidst steady Eurozone CPI.
  • GBP/USD cautious near pivot; potential for bearish shift below 1.2497.
  • DXY faces resistance at 106.536; bearish below pivot point of 105.927.
Dollar Index

In this article:

Market Overview

The Eurozone’s inflation figures remained stable with the Final Core CPI y/y and Final CPI y/y both persisting at 2.9% and 2.4%, respectively, indicating a steady hold that mirrors ongoing cautiousness in the European Central Bank’s monetary policy approach. Additionally, the results from Germany’s recent 30-year bond auction showed yields softening to 2.52 from a previous 3.4, suggesting a declining investor interest in long-term Eurozone debt instruments.

In contrast, the UK’s inflation metrics released on Wednesday saw a Consumer Price Index increase to 3.2% y/y from 3.1%, and Core CPI y/y rising to 4.2% from 4.1%. These increments could pressure the Bank of England to consider tightening measures to address the rising inflation, potentially affecting the GBP’s value.

Events Ahead

  • For the USD – Key data include Unemployment Claims, expected at 215K up from 211K; the Philly Fed Manufacturing Index projected to decrease to 1.5 from 3.2; and speeches by FOMC members which could provide further insights into the Federal Reserve’s future monetary policy.
  • For the EUR – Notable are the Current Account, anticipated to show a surplus of 45.2B, up from 39.4B, signaling a strong economic position. Additionally, the German Bundesbank’s monthly report and Bundesbank President Nagel’s speech could offer deeper insights into Germany’s economic health.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The Dollar Index is currently trading at 105.819, showing a decrease of 0.25%. It sits just below the pivot point of 105.927, hinting at potential downward pressure. Key resistance levels are established at 106.536, 107.097, and 107.608.

Conversely, the index finds immediate support at 105.537, with additional support points at 105.221 and 104.901.

The 50-day Exponential Moving Average (EMA) at 105.572 and the 200-day EMA at 104.577 both underscore a near-term bearish outlook, yet provide underlying support. The Dollar Index’s current stance is bearish below the pivot point 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.

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