EUR/USD, GBP/USD, DXY Price Forecast: FOMC and Fed Decisions to Stir Markets

Market Overview

The GBP has recently reacted to the UK’s CPI figures, with the year-on-year CPI coming in at 3.4%, slightly below the previous 3.5% but still significantly above the 4.0% peak.

Core CPI year-on-year and Producer Price Index (PPI) metrics also indicate persistent inflationary pressures, suggesting a tight balancing act for the Bank of England (BoE) amidst economic growth concerns.

Events Ahead

Looking ahead, the market’s attention shifts towards the United States with the Federal Reserve’s upcoming decisions on the Federal Funds Rate, expected to hold steady at 5.50%.

The subsequent FOMC Economic Projections and Press Conference will be pivotal for USD pairs, potentially setting the tone for currency movements in the near term.

For the EUR/USD pair, upcoming events include ECB President Lagarde’s speech, Italian Industrial Production data, and broader Eurozone consumer confidence indicators, alongside comments from German Buba President Nagel.

US Dollar Index (DXY)

On March 20, the Dollar Index marginally increased by 0.05%, trading at 103.873. Positioned slightly above the day’s pivot point of 103.794, this movement signals a cautiously bullish sentiment among traders. Resistance levels are set at 104.069, 104.295, and 104.615, marking potential targets for further upward momentum.

Conversely, support is identified at 103.576, 103.322, and 103.062, providing critical thresholds to contain any downturns. The 50-Day and 200-Day Exponential Moving Averages, at 103.441 and 103.543 respectively, reinforce the bullish outlook above 103.794.

However, a drop below this pivot point could catalyze a notable selling trend, underscoring the delicate balance in current Dollar Index market dynamics.

EUR/USD Technical Forecast