EUR/USD, GBP/USD, DXY Price Forecast: DXY Nears $103.40; US Consumer Sentiment In Play

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Published: Mar 15, 2024, 07:35 GMT+00:00

Key Points:

US inflation exceeds forecasts, intensifying scrutiny on the Federal Reserve's next moves.
Euro and Pound face pivotal levels, awaiting economic indicators for directional cues.
Dollar Index's slight rise hints at investor caution amid global economic uncertainties.

EUR/USD, GBP/USD, DXY Price Forecast: DXY Nears $103.40; US Consumer Sentiment In Play

Market Overview

Yesterday’s release of US economic data showed a higher-than-expected Producer Price Index (PPI) at 0.6% against a forecast of 0.3%, suggesting inflationary pressures. Core PPI also exceeded expectations at 0.5%, reinforcing the view that the Federal Reserve might maintain a tighter monetary stance.

Retail Sales data presented a mixed picture with a 0.6% rise, indicating resilience in consumer spending despite higher prices. However, Core Retail Sales dipped by -0.8%, hinting at underlying consumer caution. Unemployment Claims at 209K, below the anticipated 218K, underscored a robust labor market.

Events Ahead

Today, focus shifts to the Empire State Manufacturing Index, expected to reveal a contraction at -7.0, and Import Prices which may reflect inflationary trends with a forecast of a 0.3% increase.

Industrial Production and Capacity Utilization Rate data will offer insights into the manufacturing sector’s health. Preliminary figures from the University of Michigan will gauge consumer sentiment and inflation expectations, critical for understanding future consumer behavior and spending.

In Europe, attention turns to France’s Final CPI, anticipated to align with previous figures at 0.8%, and Italy’s Retail Sales, expected to show a modest recovery. The Italian Trade Balance has already shown a positive shift, indicating a healthier trade environment.

US Dollar Index (DXY)

Dollar Indexa

The Dollar Index (DXY) slightly increased, recording a 0.07% rise to 103.426. Currently hovering around the pivot point of 103.387, the index demonstrates potential for further upward momentum if it remains above this threshold.

Immediate resistance is observed at 103.660, with subsequent levels at 103.932 and 104.295 posing challenges for continued growth. Support levels are identified at 103.104, 102.733, and 102.355, offering potential stabilization points in case of a decline.

The 50-day EMA at 103.156 and the 200-day EMA at 103.521 suggest a tight trading range, underscoring a cautiously bullish outlook contingent upon maintaining above the pivot point.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair saw a slight decline of 0.05%, trading at 1.08774, closely aligning with its pivot point at 1.0874. This level acts as a critical juncture for future price movements.

Resistance is set at 1.0904, with additional barriers at 1.0930 and 1.0964 potentially capping upward momentum. On the downside, support lies at 1.0844, with further floors at 1.0821 and 1.0800, which could mitigate any pullbacks.

The 50-day and 200-day EMAs, at 1.09042 and 1.08606 respectively, indicate a nuanced market sentiment, suggesting a slightly bullish outlook as long as the price stays above the pivot point.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair experienced a minor setback, decreasing by 0.13% to 1.27384, hovering just below the pivotal 1.2754 mark. This key level serves as a determinant for the pair’s short-term direction. Resistance is found at 1.2788, with further ceilings at 1.2824 and 1.2864, potentially challenging bullish efforts.

Conversely, support is identified at 1.2710, extending to 1.2670 and 1.2617, crucial for halting further declines. The 50-day and 200-day EMAs, at 1.2765 and 1.2698 respectively, suggest a narrow trading range, hinting at a cautiously bearish outlook unless a decisive move above 1.2754 occurs, which could shift the trend to bullish.

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

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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