EUR/USD, GBP/USD, DXY Price Forecast: DXY Finds Support Near $105.50; Buy Now?

Arslan Ali
Published: Apr 30, 2024, 08:13 GMT+00:00

Key Points:

  • French consumer spending rises to 0.4%; Eurozone's economic indicators mildly positive.
  • German retail sales surge by 1.8%, signaling robust consumer activity in Eurozone.
  • UK mortgage approvals increase, hinting at growing confidence in the housing market.
EUR/USD, GBP/USD, DXY Price Forecast: DXY Finds Support Near $105.50; Buy Now?

In this article:

Market Overview

Recently, the EUR/USD reacted to several key economic indicators from the Eurozone. French consumer spending saw a slight uptick, reporting a 0.4% increase month-over-month, which was better than the expected 0.2%. Additionally, French GDP for the quarter rose by 0.2%, signaling modest economic growth.

In Germany, retail sales notably surged by 1.8% month-over-month, reflecting a significant recovery in consumer activity and potentially setting a positive tone for the Eurozone’s economic outlook.

For the GBP/USD, UK-specific economic indicators also painted a complex picture. The British Retail Consortium (BRC) Shop Price Index increased by 0.8% year-over-year, pointing to sustained inflationary pressures.

Mortgage approvals in the UK also edged higher to 61,000, up from 60,000 the previous month, suggesting a tentative confidence in the housing market.

Events Ahead

The EUR/USD pair looks forward to the release of the Core CPI Flash Estimate, anticipated at 2.6% year-over-year, which could provide insights into inflation trends and influence European Central Bank policies. Additionally, the Preliminary Flash GDP for the Eurozone is expected to show a modest 0.1% growth quarter-over-quarter.

For the GBP/USD, upcoming economic reports include the M4 Money Supply, expected to grow by 0.4% month-over-month, and Net Lending to Individuals, which previously stood at £1.7 billion. These indicators will offer further clarity on the UK’s financial health and could sway Bank of England policy decisions.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The Dollar Index, rose modestly to 105.839, marking a 0.18% increase. Currently positioned above the pivot point at 105.521, the index suggests a bullish sentiment in the short term. Should it maintain levels above this pivot, further gains could be seen with immediate resistance points at 106.111, 106.536, and 107.097.

Conversely, should the index dip below 105.521, it may encounter significant selling pressure, with support levels identified at 104.901, 104.434, and 103.865, which could potentially stabilize further declines.

Technical analysis shows the 50-Day Exponential Moving Average (EMA) at 105.789 and the 200-Day EMA at 105.081, both reinforcing the current bullish trajectory of the Dollar Index.

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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