EUR/USD, GBP/USD, DXY Price Forecast: Key USD Index Hits $105.16, Buy Now?

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Published: May 6, 2024, 07:41 GMT+00:00

Key Points:

USD Average Hourly Earnings: Recorded a slight decrease to 0.2%, below the expected 0.3% for key currency pairs.
USD Non-Farm Employment Change: Disappointed with 175K jobs added, missing forecasts of 238K, impacting EUR/USD and GBP/USD.
USD Unemployment Rate: Remained stable at 3.9%, aligning with predictions and influencing both major currency pairs.

EUR/USD, GBP/USD, DXY Price Forecast: Key USD Index Hits $105.16, Buy Now?

Market Overview

Last week’s economic releases provided insights into the performance of the US dollar against major currencies, including the Euro (EUR/USD) and the British pound (GBP/USD). Notable figures include:

USD Average Hourly Earnings m/m: Recorded at 0.2%, slightly lower than the anticipated 0.3% for EUR/USD and GBP/USD.
USD Non-Farm Employment Change: Reflecting at 175K, falling short of the expected 238K, affecting both currency pairs.
USD Unemployment Rate: Holding steady at 3.9%, in line with expectations for both EUR/USD and GBP/USD.
Final Services PMI: The US reported 51.3, while Europe noted slight variations with figures like 50.9 for EUR/USD and GBP/USD.

Events Ahead

Looking ahead, key events and data releases will shape the trajectory of EUR/USD and GBP/USD. Noteworthy upcoming events include:

EUR/USD: Anticipated releases include Spanish Unemployment Change at -60.5K and various PMI figures indicating economic sentiment.
GBP/USD: Observance of the Early May Bank Day in the UK may affect trading volumes and currency movements.

Investors will closely monitor speeches from FOMC members Barkin and Williams, along with the Loan Officer Survey results. Additionally, Eurozone PMIs and the Sentix Investor Confidence index will offer insights into market sentiment.

US Dollar Index (DXY)

Dollar Index

In today’s technical outlook, the Dollar Index stands at $105.166, marking a slight increase of 0.09%. The pivot point at $104.922 serves as a critical juncture; surpassing this could propel the index towards immediate resistance at $105.558. Further resistances are poised at $106.006 and $106.474.

On the flip side, immediate support forms at $104.530, with subsequent levels at $104.200 and $103.884.

The 50-day EMA is currently at $105.636, and the 200-day EMA at $105.198, both suggesting a consolidation phase. A steadfast move above the pivot point indicates a bullish trend, while a descent below could trigger a sharp sell-off.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair exhibits modest gains, trading at $1.07640, a 0.05% increase. The pivot point at $1.07473 is pivotal; breaching this could lead to resistance encounters at $1.07984, $1.08335, and $1.08811.

Conversely, support levels are established at $1.07124, $1.06751, and $1.06395. The 50-day EMA stands at $1.07141, while the 200-day EMA is at $1.07438, suggesting a potential for consolidation.

The outlook remains bullish above the pivot point, but a drop below could signal a sharp selling trend in the market. Investors should monitor these levels closely as they navigate the currency’s movements.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair remains static at $1.25453, and the currency’s pivot point is at $1.25285, which is crucial for determining the direction. A move above this level could see the pair challenge resistances at $1.25703, $1.26182, and $1.26649.

Conversely, a decline would bring support at $1.24669, $1.24230, and $1.23797 into focus. The 50-day EMA at $1.25137 and the 200-day EMA at $1.25466 suggest a neutral to bullish bias. The outlook is bullish above the pivot point, but a break below could lead to a significant sell-off.

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

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.

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