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EUR/USD, GBP/USD, DXY Price Forecast: DXY Steady over $106; Buying Ahead?

By:
Arslan Ali
Published: Apr 23, 2024, 07:37 GMT+00:00

Key Points:

  • EUR/USD pair saw a modest rise to $1.06463, testing pivotal resistance at $1.0664.
  • GBP/USD settled at $1.23445, near crucial pivot point of $1.23607, influencing near-term direction.
  • DXY declined slightly to $106.195, hovering above pivot at $105.927, awaiting US economic data impact.
Dollar Index

In this article:

Market Overview

The EUR/USD pair experienced some volatility as recent economic data painted a mixed picture of the Eurozone’s economic health. The French Flash Manufacturing PMI fell short of expectations at 44.9, signaling a contraction, while the Services PMI edged above forecasts at 50.5, suggesting modest expansion. The discrepancy between manufacturing and service sectors points to an uneven recovery path across Europe.

For the GBP/USD pair, UK public sector net borrowing was reported higher than anticipated at £11.0 billion, hinting at potential fiscal pressures that might influence future monetary policy and economic stability in the UK.

Events Ahead

Looking ahead, the focus shifts to German Flash Manufacturing PMI which is projected at 42.8, and the broader Eurozone Flash Manufacturing PMI at 46.5. These figures will be pivotal in assessing the industrial health of Europe’s largest economy and the Eurozone at large.

In the UK, traders will closely monitor the Flash Manufacturing PMI and Services PMI, both crucial for gauging the immediate economic trajectory and sentiment towards the British pound.

Meanwhile, in the U.S., upcoming data releases include Flash Manufacturing and Services PMIs, along with New Home Sales, all of which could provide further clarity on the economic landscape and influence the Federal Reserve’s policy direction.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The Dollar Index (DXY) saw a slight decline in today’s trading, dropping by 0.03% to $106.195. Currently, the index hovers slightly above its pivot point of $105.927, indicating a precarious balance in market sentiment. Resistance levels are poised at $106.536, $107.097, and $107.608, which could challenge upward movements if approached.

Conversely, support can be found at $105.537, with further safety nets at $105.221 and $104.901, potentially halting further declines. Technical indicators suggest a bullish outlook if the index remains above the pivot point, with the 50-day and 200-day exponential moving averages at $105.874 and $104.848, respectively, reinforcing this stance.

EUR/USD Technical Forecast

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

About the Author

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.

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