EUR/USD, GBP/USD, DXY Price Forecast: ECB & Fed Decisions in Focus

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Published: Apr 4, 2024, 07:56 GMT+00:00

Key Points:

U.S. ADP employment beats expectations at 184K, hinting at strong job growth.
ECB's upcoming monetary policy and Eurozone PMIs pivotal for EUR/USD direction.
FOMC speeches and U.S. economic data set to shape market trends for GBP/USD.

EUR/USD, GBP/USD, DXY Price Forecast: ECB & Fed Decisions in Focus

Market Overview

Recent data has shown a mixed bag of economic indicators affecting the EUR/USD and GBP/USD pairs. The ADP Non-Farm Employment Change in the U.S. outpaced expectations at 184K, suggesting robust employment growth.

In contrast, Europe’s Service PMI readings varied, with Spain and Italy beating forecasts, while France’s numbers faltered.

Events Ahead

Looking ahead, the focus shifts to upcoming significant events. For EUR/USD, key data releases include the ECB Monetary Policy Meeting Accounts and various Eurozone Service PMIs, with particular attention on the final figures and PPI data, which could indicate inflation trends and impact ECB’s decisions. Spanish and French bond auctions will also provide insights into investor confidence and borrowing costs in the region.

For GBP/USD, the UK’s Final Services PMI remains a critical indicator, providing a snapshot of the service sector’s health in the post-Brexit economy. Across the pond, the U.S. market anticipates Unemployment Claims, Trade Balance figures, and Natural Gas Storage data, while speeches from FOMC members Barkin, Mester, and Kugler will be closely monitored for clues on the Federal Reserve’s monetary policy direction.

US Dollar Index (DXY)

Dollar Index

The Dollar Index, with a minor decline to 104.182, indicates market hesitation. The current technical setup shows a pivot point at 104.32, with resistance levels at 104.63, 104.96, and 105.31, suggesting potential upward barriers.

Support is identified at 103.77, 103.54, and 103.23, which may cushion downward movements.

The 50-day EMA at 104.40 and the 200-day EMA at 103.93 hint at a tight trading range. A bearish breakout below 104.32 could initiate a selling trend towards 103.77, signaling a cautious market sentiment with a possibility of bullish reversal on crossing above the pivot.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair shows slight gains, trading at 1.08390, with a pivot point at 1.0847 indicating a narrow trading range. Resistance is seen at 1.0883, 1.0907, and 1.0943, presenting potential hurdles for bullish movement.

Conversely, support levels at 1.0806, 1.0776, and 1.0731 delineate areas where the price might stabilize. The 50-day EMA at 1.0805 and the 200-day EMA at 1.0837 suggest a delicate balance in market sentiment.

A bearish trend is likely below 1.0847, but a breakout above this level could signal a shift to bullish momentum, underscoring the critical nature of this threshold in guiding EUR/USD’s direction.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair edges higher, currently at 1.26563, with a pivot point set at 1.26610, marking the threshold for trend direction. Resistance levels are identified at 1.27256, 1.27634, and 1.28024, challenging any upward momentum.

On the downside, support is established at 1.26165, 1.25828, and 1.25418, indicating potential areas for price stabilization. The 50-day and 200-day EMAs at 1.26231 and 1.26652, respectively, suggest a market at a crossroads.

A trend below 1.26610 points to bearish pressure, whereas surpassing this level could pivot to a bullish stance, highlighting a critical juncture for the GBP/USD’s future movements.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Arslan Aliauthor

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.