EUR/USD, GBP/USD, DXY Price Forecast: Market Eyes Fed’s Policy, Services PMI

Arslan Ali
Published: Mar 5, 2024, 08:11 UTC

Key Points:

  • EUR/USD sees minor dip amid mixed Eurozone data; eyes on upcoming US economic indicators.
  • GBP/USD's slight decline reflects cautious market; pivotal UK Services PMI data awaited.
  • DXY shows modest gain; Fed's policy cues and key US Services PMI to influence direction.
US Dollar Index and FOMC

In this article:


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

The French Government’s budget balance widened to -25.7B, while Spain’s unemployment change offered a positive surprise with a -7.5K change, better than the anticipated 50.0K increase.

The Sentix Investor Confidence index in the Eurozone dipped to -10.5, indicating a slightly pessimistic investor outlook.

Additionally, French Industrial Production experienced a contraction of -1.1% month-over-month. In the UK, the BRC Retail Sales Monitor showed a year-over-year increase of 1.0%, slightly under the previous 1.6%.

Events Ahead

Looking ahead, the market’s attention turns to a series of key U.S. economic indicators and speeches. The Final Services PMI is expected at 51.4, with the ISM Services PMI forecasted at 53.0. Factory Orders m/m are anticipated to show a contraction of -3.1%. FOMC Member Barr’s upcoming speeches could provide crucial insights into the Federal Reserve’s future policy directions.

In the Eurozone, investors will be keenly watching the Services PMI updates from Spain, Italy, France, and Germany, along with the Eurozone’s Final Services PMI and Producer Price Index (PPI) data, to gauge the health of the services sector and inflationary pressures.

The UK will also release its Final Services PMI data, expected to remain steady at 54.3, providing further clues on the UK’s economic recovery trajectory.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The Dollar Index slightly increased to 103.925, showing a 0.09% gain. This movement situates it just above the pivot point of 103.82, hinting at a bullish sentiment. It faces resistance levels at 104.24, 104.44, and 104.69 that could challenge further advances.

On the downside, support levels are found at 103.60, 103.43, and 103.16, providing cushioning against potential pullbacks. The 50-day and 200-day Exponential Moving Averages at 103.943 and 103.818 respectively, support a bullish trend as long as the index remains above the pivot.

This suggests a cautiously optimistic outlook for the dollar in the current market environment.

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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