Recent data releases have provided mixed signals, such as, the U.S. Consumer Price Index (CPI) met expectations, with a 0.2% increase month-over-month and a 2.9% year-over-year rise, slightly below the anticipated 3.0%.
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EUR/USD, GBP/USD, DXY Price Forecast: DXY Steady at $102.57, Retail Sales Key
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Key Points:
- Dollar Index hovers at $102.57, risks bearish trend if it breaks below $102.70.
- EUR/USD faces potential drop to $1.09863 amid overbought conditions and investor indecision.
- GBP/USD shows slight bullish bias; holds above $1.28193 could extend gains to $1.28672.
These figures have kept the Dollar Index (DXY) relatively flat, currently trading at 102.57. Meanwhile, the UK’s GDP figures came in as expected, with no growth month-over-month and a 0.6% increase quarter-over-quarter, down from the previous 0.7%.
This stagnation suggests that the GBP/USD could face headwinds if economic conditions don’t improve.
Events Ahead
Looking ahead, several critical U.S. economic indicators are on the horizon. Core Retail Sales are expected to rise by 0.4%, while overall Retail Sales are forecasted to grow by 0.4%, up from 0.0% previously. These numbers could lend some strength to the Dollar Index if they meet or exceed expectations.
Additionally, the Unemployment Claims report is forecasted to come in at 236,000, slightly above the previous 233,000, which could indicate some softness in the labour market.
The Empire State Manufacturing Index and the Philly Fed Manufacturing Index will also be closely watched, with forecasts of -5.9 and 5.4, respectively.
Any significant deviations from these expectations could influence both EUR/USD and GBP/USD, as investors adjust their expectations for Federal Reserve policy moves.
EUR/USD is currently trading at $1.10120, holding steady with no significant change. The pair have entered an overbought zone and recently formed a shooting star candlestick pattern on the 4-hour chart, signalling potential exhaustion among the bulls. This pattern, followed by the doji candles, indicates indecision among investors.
The immediate support level to watch is $1.09863, with a potential drop toward this level likely. If the pair tests this support and holds, we could see a bullish reversal.
However, a break below $1.09863 could trigger further selling, targeting the next supports at $1.09462 and $1.09157.
GBP/USD Technical Forecast
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.
