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EUR/USD, GBP/USD, DXY Price Forecast: DXY Nears $105, US CPI in Focus

By:
Arslan Ali
Published: Jul 11, 2024, 07:00 GMT+00:00

Key Points:

  • German industrial production data boosts Euro, hitting a 0.5% increase versus 0.0% forecast.
  • UK MPC members' speeches and House Price Balance impact GBP; balance reported at -17%.
  • US Dollar weakens with Powell's testimony and steady Wholesale Inventories at 0.6%.
EUR/USD, GBP/USD, DXY Price Forecast: DXY Nears $105, US CPI in Focus
In this article:

Market Overview

On Wednesday, July 10, German Buba President Nagel’s speeches and Italian Industrial Production data, which showed a 0.5% increase compared to a forecast of 0.0%, impacted the Euro (EUR). Meanwhile, in the UK, speeches from MPC Members Pill and Mann likely affected the British Pound (GBP), with the RICS House Price Balance reporting a decline to -17%, matching previous data.

In the US, Federal Reserve Chair Powell’s testimony was a focal point, along with the Final Wholesale Inventories report showing a consistent 0.6% change.

Events Ahead

On Thursday, July 11, the German Final CPI m/m is expected to remain steady at 0.1%. For the UK, GDP m/m is forecasted at 0.2%, alongside Construction Output at 0.5%, and Industrial Production at 0.3%.

The Goods Trade Balance is expected to narrow to -15.6B from -19.6B. The BOE Credit Conditions Survey and NIESR GDP Estimate, projected at 0.7%, will also be key.

In the US, the focus will be on the Core CPI m/m, expected to remain at 0.2%, and the CPI y/y, anticipated to dip to 3.1% from 3.3%. Unemployment Claims are forecasted at 236K, slightly down from 238K.

The Federal Budget Balance is projected to show a significant improvement, moving from -$347.1B to -$71.2B. The Dollar Index, currently at 104.931, down 0.03%, could face further pressure if the CPI data indicates cooling inflation.

Powell’s cautious tone and potential dovish hints from FOMC members could reinforce a bearish outlook.

US Dollar Index (DXY)

Dollar Index Price Chart - Source: Tradingview
Dollar Index Price Chart – Source: Tradingview

 

The Dollar Index is trading at $104.931, down 0.03% in the latest session. The two-hour chart highlights key levels with a pivot point at $105.180. Immediate resistance is at $105.331, followed by $105.481 and $105.624. On the downside, immediate support is at $104.803, with further support at $104.662 and $104.528.

Technical indicators suggest a bearish trend, with the 50-day EMA at $105.095 and the 200-day EMA at $105.297. The outlook remains bearish below $105.180; a break above this level could shift the trend to bullish.

EUR/USD Technical Forecast

EUR/USD Price Chart - Source: Tradingview
EUR/USD Price Chart – Source: Tradingview

EUR/USD is trading at $1.08369, up 0.07% in the latest session. The two-hour chart highlights key levels with a pivot point at $1.08309. Immediate resistance is at $1.08463, followed by $1.08615 and $1.08752. On the downside, immediate support is at $1.08139, with further support at $1.07993 and $1.07835.

Technical indicators show a bullish trend, with the 50-day EMA at $1.08174 and the 200-day EMA at $1.07795. The outlook remains bullish above $1.08309; a break below this level could trigger a sharp selling trend.

GBP/USD Technical Forecast

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart – Source: Tradingview

About the Author

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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