EUR/USD, GBP/USD, DXY Price Forecast: DXY Nears $105, Downtrend Ahead?

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Published: Jul 10, 2024, 07:30 GMT+00:00

Key Points:

Germany's trade balance showed a €24.9 billion surplus in June, beating forecasts.
US Consumer Credit rose by $11.4 billion, surpassing the $9.7 billion forecast.
UK retail sales fell 0.5% year-over-year, missing the expected 0.9% increase.

EUR/USD, GBP/USD, DXY Price Forecast: DXY Nears $105, Downtrend Ahead?

Market Overview

Earlier this week, Germany’s trade balance showed a surplus of €24.9 billion in June, exceeding forecasts of €19.9 billion. Despite this positive news, the Sentix Investor Confidence index for the Eurozone plunged to -7.3, far below the expected -0.6, suggesting growing pessimism among investors.

In the UK, MPC Member Haskel spoke, and the BRC Retail Sales Monitor indicated a 0.5% year-over-year decline in retail sales, missing expectations of a 0.9% increase.

Across the Atlantic, US Consumer Credit rose by $11.4 billion in June, beating the forecast of $9.7 billion, while the NFIB Small Business Index inched up to 91.5 from the previous 90.3.

Events Ahead

Looking ahead to Wednesday, German Buba President Nagel will speak twice, while Italy’s industrial production data, forecasted to remain flat, could provide further insights into the Eurozone’s economic health.

In the UK, MPC Members Pill and Mann will deliver speeches, and markets will closely watch for any hints on future monetary policy.

In the US, all eyes will be on Fed Chair Powell’s testimony and the release of crude oil inventory data, expected to show a modest increase of 0.7 million barrels.

Additionally, the 10-year bond auction and speeches from several FOMC members, including Bowman, Goolsbee, and Cook, are likely to add volatility to the USD.

In the UK, disappointing retail sales figures and cautious commentary from MPC members could keep the pound under pressure. Meanwhile, the robust US consumer credit data and positive small business sentiment bolster the dollar.

US Dollar Index (DXY)

Dollar Index Price Chart – Source: Tradingview

The Dollar Index is currently trading at $105.098, down by 0.02%. The pivot point at $105.180 serves as a critical level. Immediate resistance is at $105.331, followed by $105.481 and $105.624.

On the downside, immediate support is found at $104.962, with further support levels at $104.803 and $104.662. Technical indicators show the 50-day Exponential Moving Average (EMA) at $105.133 and the 200-day EMA at $105.328, both acting as significant levels.

The outlook is bearish below $105.180, but a break above this level could shift the bias to bullish.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is currently trading at $1.08195, reflecting a modest increase of 0.05%. The pivot point at $1.08101 is crucial, serving as a key support level. Immediate resistance is observed at $1.08308, followed by $1.08463 and $1.08615.

On the downside, immediate support is located at $1.07984, with further support levels at $1.07893 and $1.07794. Technical indicators show the 50-day Exponential Moving Average (EMA) at $1.08105 and the 200-day EMA at $1.07734, both acting as significant support levels.

The outlook remains bullish above $1.08101, but a break below this level could trigger a sharp selling trend.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD is currently trading at $1.27923, reflecting a slight increase of 0.05%. The pivot point at $1.2780 is crucial, serving as a key support level. Immediate resistance is identified at $1.2823, followed by $1.2847 and $1.2872.

On the downside, immediate support is at $1.2759, with further support levels at $1.2734 and $1.2717. Technical indicators show the 50-day Exponential Moving Average (EMA) at $1.2781 and the 200-day EMA at $1.2727, both acting as significant support levels.

The outlook remains bullish above $1.2780, but a break below this level could trigger a sharp selling trend.

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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