EUR/USD, GBP/USD, DXY Price Forecast: DXY Rebounds to $104.25; What’s Next?

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Published: Jul 15, 2024, 06:58 GMT+00:00

Key Points:

German WPI missed expectations, reflecting weaker economic activity; PPI exceeded forecasts in the U.S.
University of Michigan Consumer Sentiment dropped to 66.0, below expectations, impacting the Dollar Index.
Eurozone Industrial Production and Fed Chair Powell’s speech will influence EUR/USD and market sentiment.

EUR/USD, GBP/USD, DXY Price Forecast: DXY Rebounds to $104.25; What’s Next?

Market Overview

Last Friday, the German Wholesale Price Index (WPI) came in at -0.3%, missing the forecasted 0.2%, reflecting weaker economic activity. Meanwhile, the French Final Consumer Price Index (CPI) met expectations at 0.1%, providing no surprises to the market.

In the U.S., Core Producer Price Index (PPI) rose by 0.4%, exceeding the expected 0.2%, while the headline PPI increased by 0.2%, beating the 0.1% forecast.

However, the University of Michigan’s Consumer Sentiment dropped to 66.0, below the expected 68.5, and inflation expectations fell to 2.9%, slightly below the previous 3.0%. These mixed signals have kept the Dollar Index relatively stable, closing at $104.28, up 0.13%.

Events Ahead

Looking ahead, the EUR/USD will be influenced by the Eurozone’s Industrial Production data, forecasted to decline by 0.9%. Additionally, Eurogroup meetings will likely shape sentiment around the euro.

In the U.S., the Empire State Manufacturing Index is anticipated to slightly improve to -5.5 from -6.0. The most significant event will be Fed Chair Jerome Powell’s speech, which could provide insights into the Federal Reserve’s future monetary policy direction.

US Dollar Index (DXY)

Dollar Index Price Chart – Source: Tradingview

The Dollar Index is currently trading at $104.28, up 0.13%. On the 2-hour chart, the pivot point is at $104.20. Immediate resistance levels are $104.39, $104.53, and $104.66. Support levels are $104.05, $103.91, and $103.78.

Technical indicators show the 50-day Exponential Moving Average (EMA) at $104.62 and the 200-day EMA at $105.09. The outlook remains bullish above $104.20. However, a break below this level could trigger significant selling pressure.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD is currently trading at $1.08879, down 0.10%. On the 2-hour chart, the pivot point is at $1.08968. Immediate resistance levels are at $1.09114, $1.09274, and $1.09431, while immediate support levels are at $1.08807, $1.08623, and $1.08443.

Technical indicators show the 50-day Exponential Moving Average (EMA) at $1.08588 and the 200-day EMA at $1.08017. The outlook remains bearish below $1.08968, indicating potential downward pressure. However, a break above this level could signal a bullish bias.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD is currently trading at $1.29655, down 0.10%. On the 2-hour chart, the pivot point is at $1.29610. Immediate resistance levels are $1.29907, $1.30144, and $1.30373. Support levels are $1.29336, $1.29025, and $1.28729.

Technical indicators show the 50-day Exponential Moving Average (EMA) at $1.28930 and the 200-day EMA at $1.27833. The outlook remains bullish above $1.29610. However, a break below this level could trigger significant selling pressure.

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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