EUR/USD, GBP/USD, DXY Price Forecast: DXY Jumps to $105; More Upside Ahead?

Arslan Ali
Published: May 7, 2024, 07:54 GMT+00:00

Key Points:

  • Spanish Services PMI Surpasses Expectations at 56.2: Indicates continued resilience in Spain's service sector, boosting economic outlook.
  • German and Italian Services PMIs Show Growth: Readings of 53.2 and 54.3 suggest steady economic activity in key European markets.
  • UK Construction PMI Slightly Positive at 50.4: Provides modest support to GBP, reflecting slight expansion in UK construction sector.
EUR/USD, GBP/USD, DXY Price Forecast: DXY Jumps to $105; More Upside Ahead?

In this article:

Market Overview

In recent trading sessions, the Spanish Services PMI exceeded expectations slightly at 56.2, indicating resilience in the services sector, an essential component of economic health. The Italian and German Services PMIs also suggested modest sectoral growth with readings of 54.3 and 53.2, respectively. Meanwhile, the French Services PMI showed marginal growth at 51.3, slightly above prior figures.

French preliminary private payrolls and trade balance also painted a mixed picture of the domestic economy, with payrolls increasing by 0.2% quarter-over-quarter and the trade deficit standing at -€5.5 billion, reflecting continued economic challenges.

For GBP/USD, the key data point was the UK Construction PMI, which registered at 50.4, indicating a small expansion in construction activities and providing some support to the GBP amidst ongoing economic uncertainties.

Events Ahead

Looking ahead, several significant events could influence the EUR/USD and GBP/USD pairs further. The market anticipates the next statements from German Buba President Nagel, scheduled for 4:00 PM and 7:00 PM respectively, which are expected to provide insights into the future monetary policy direction of Europe’s largest economy.

Additionally, the U.S. Consumer Credit report due at 9:00 PM, with an expected figure of $14.8 billion, will offer clues into consumer spending trends, which are vital for assessing the economic momentum in the United States.

US Dollar Index (DXY)

Dollar Index
Dollar Index

Today’s technical analysis for the Dollar Index shows a slight increase, rising by 0.08% to 105.227. Positioned just above its pivot point at 105.042, the index suggests potential upward movement if it can maintain its current trajectory. Resistance levels are set at 105.492, 105.886, and 106.287, each marking critical thresholds that could define the near-term trend.

Conversely, support lies at 104.530, with additional levels at 104.200 and 103.884, which may serve as safety nets against further declines. Both the 50-day and 200-day Exponential Moving Averages hover around the current price, indicating a neutral to slightly bullish outlook. A decisive move above 105.492 would confirm a stronger bullish sentiment, while a drop below could signal bearish trends.

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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