EUR/USD, GBP/USD, DXY Price Forecast: DXY Holds Firm Above $104.15; Time to Buy?

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Updated: Mar 27, 2024, 07:55 UTC

Key Points:

Dollar Index Shows Resilience: Dollar Index nudges to 104.365, hinting at sustained strength ahead of crucial economic updates.
EUR/USD Awaits Key Data: Spanish Flash CPI and Italian Bond Auction could pivot EUR/USD's course amidst Eurozone's economic indicators.
GBP/USD Monitors BOE's Moves: Upcoming FPC Meeting Minutes crucial for GBP/USD as traders eye Bank of England's monetary policy direction.

Market Overview

With the Dollar Index recently reflecting on consumer confidence levels—recorded at 104.7, against an expected 106.9 and a previous 104.8—attention now shifts to forthcoming data releases that are likely to influence currency dynamics significantly.

Events Ahead

For EUR/USD, the upcoming Spanish Flash CPI year-on-year is forecasted at 3.1%, a slight decrease from the previous 2.8%, potentially affecting the Euro’s valuation against the Dollar.

Furthermore, the Italian 10-year Bond Auction, with a prior yield of 3.91 and a bid-to-cover ratio of 1.4, remains a critical event, offering insights into market sentiment towards Eurozone debt and its impact on the EUR/USD exchange rate.

GBP/USD traders are set to digest the Financial Policy Committee (FPC) Meeting Minutes and Statement from the UK. These documents are instrumental in understanding the Bank of England’s future monetary policy stance, which could sway the Pound’s strength.

The Dollar’s trajectory will also hinge on a series of US economic indicators due tomorrow on Thursday:

Final GDP quarter-on-quarter, expected at 3.2%, mirroring previous estimates,
Unemployment Claims, anticipated around 212K, slightly up from 210K,
Final GDP Price Index quarter-on-quarter, forecasted at 1.6%,
Chicago PMI, with projections at 45.9, down from 44.0,
Pending Home Sales month-on-month, expected at 1.4%, contrasting with a prior -4.9%,
Revised University of Michigan Consumer Sentiment, estimated to remain steady at 76.5.

US Dollar Index (DXY)

Dollar Index

The Dollar Index edged up by 0.07%, reaching 104.365, indicative of a slight strengthening against a basket of currencies. Currently, the index is trading above its pivot point at 104.188, suggesting a bullish outlook in the near term. The immediate resistance levels are identified at 104.496, 104.736, and 104.978, potentially capping gains.

Conversely, supports at 103.989, 103.675, and 103.378 could offer fallback positions in the event of a downturn. Technical indicators, including the RSI and the positioning of the 50-day and 200-day EMAs at 103.950 and 103.692 respectively, reinforce the index’s bullish trajectory above the pivotal 104.188 mark.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair slightly declined by 0.03% to trade at 1.08278, positioned just below the pivotal mark at 1.08348, indicating a bearish sentiment in the near term. Immediate support and resistance levels are outlined at 1.08022 and 1.08557 respectively, providing a narrow range for potential price movement.

Technical indicators, specifically the 50-day and 200-day Exponential Moving Averages at 1.08552 and 1.08582, signal a tendency towards selling below the 1.08550 level. A decisive move above the pivot point could alter the market mood towards bullish, yet currently, the bias leans towards bearish beneath 1.08348.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair experienced a modest decrease, trading down 0.10% at 1.26164, positioned just beneath its pivot point at 1.26592. This positioning underlines a bearish outlook, with the potential for a reversal should it cross above this critical threshold.

Technical analysis reveals immediate support levels at 1.25760 and 1.25357, with further down at 1.25019, outlining the currency pair’s possible directions in the short term. Resistance levels set at 1.26944, 1.27475, and 1.28046 delineate the upper limits of its current trading range.

The closely watched 50-day and 200-day Exponential Moving Averages (EMAs), at 1.26748 and 1.26900 respectively, suggest a predilection for selling pressure below the 1.2660 mark.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Arslan Aliauthor

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.