EUR/USD, GBP/USD, DXY Price Forecast: ECB Rate Decision in Highlights

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Published: Mar 7, 2024, 07:53 UTC

Key Points:

The Dollar Index's minor decline underscores market caution ahead of significant U.S. economic releases and Fed commentary.
EUR/USD's slight bullish trend faces a test with the upcoming ECB rate decision, a critical event that could either reinforce or alter its trajectory.
GBP/USD's stability above its pivot point reflects underlying optimism, yet upcoming economic indicators and central bank insights remain crucial to its short-term direction.

EUR/USD, GBP/USD, DXY Price Forecast: ECB Rate Decision in Highlights

EUR/USD and GBP/USD Price Forecast: Analysis and Events Ahead

The Dollar Index has witnessed a minor decline, reflecting investor reactions to U.S. labor market data, including a 140K rise in ADP Non-Farm Employment Change against an anticipated 149K, and the Fed Chair’s testimony.

EUR saw a notable dip in German Factory Orders by -11.3%, much lower than the -6.0% forecast, while GBP showed resilience with a 0.4% increase in Halifax HPI m/m, although below the 0.8% expectation.

Events Ahead

Focus intensifies with the upcoming U.S. Unemployment Claims projected at 217K and Powell’s second testimony. The climax builds towards Friday’s reports: Average Hourly Earnings expected at 0.2%, Non-Farm Employment Change forecasted at 198K from the previous 353K, and the Unemployment Rate anticipated to hold steady at 3.7%.

For EUR/USD, the ECB’s rate decision and policy statements are critical. A hawkish or dovish stance could either bolster or pressure the Euro.

US Dollar Index (DXY)

Dollar Index

The Dollar Index today exhibits a slight downtrend, decreasing by 0.08% to settle at 103.233, underscoring subtle yet present market apprehensions. Situated marginally below its pivot point at 103.288, the index currently navigates a narrow trading range. It faces immediate resistance at 103.428, with subsequent hurdles at 103.634 and 103.953 potentially challenging any bullish momentum.

Conversely, the support structure is clearly defined at 103.140, extending down to 102.907 and further to 102.683, marking critical zones where buyers may emerge to stall further declines.

The juxtaposition of the 50-day and 200-day Exponential Moving Averages, both hovering around 103.787 and 103.788 respectively. Given these dynamics, the outlook for the Dollar Index is cautiously bearish below the 103.288 mark.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair saw a modest uptick today, edging up by 0.02% to trade at 1.09018, hinting at restrained optimism in the market. Positioned slightly above the pivotal mark at 1.0893, it suggests a tentative bullish sentiment among traders.

Resistance levels loom at 1.0916, 1.0939, and 1.0963, marking potential ceilings for further advances. Support is established at 1.0867, with additional cushions at 1.0822 and 1.0796 to catch potential pullbacks.

The 50-day and 200-day Exponential Moving Averages, at 1.0849 and 1.0833 respectively, bolster the bullish perspective, provided the pair remains above the pivot point. However, dipping below 1.0893 could pivot the outlook to bearish, emphasizing the criticality of this threshold in dictating the short-term direction.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair nudged up slightly by 0.01%, positioning itself at 1.27378, indicating a cautious optimism among traders. The currency sits above its pivotal mark of 1.2715, signaling a potential bullish undertone in today’s market dynamics.

Resistance points are clearly marked at 1.2758, 1.2783, and 1.2807, which could serve as ceilings for any forthcoming price ascensions. Conversely, the pair finds immediate support at 1.2673, with further safety nets at 1.2647 and 1.2600, ready to mitigate any downturns.

The 50-day and 200-day Exponential Moving Averages, recorded at 1.2682 and 1.2655 respectively, support the bullish outlook as long as the pair remains above the pivot.

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.