EUR/USD, GBP/USD, DXY Price Forecast: PMI Data and BoE Monetary Policy In Focus

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Published: Mar 21, 2024, 07:40 UTC

Key Points:

Key Eurozone releases include Flash PMIs, offering insights into economic health and ECB policies.
The UK's Monetary Policy Summary and PMIs will unveil trends and BOE's interest rate stance.
US indicators like Unemployment Claims and Existing Home Sales will shape global sentiment.

Market Overview

The recent Federal Funds Rate announcement, maintaining the rate at 5.50%, sets the backdrop for upcoming market movements. This decision underscores the Federal Reserve’s current stance on monetary policy and its implications for the US dollar.

Events Ahead

Today, noteworthy releases include the Eurozone’s Flash Manufacturing and Services PMIs, alongside the ECB Economic Bulletin. Amidst expectations of sluggish figures such as the German Flash Manufacturing PMI at 43.1, markets anticipate insights into the region’s economic health and potential policy directions.

Simultaneously, the UK unveils its Monetary Policy Summary and releases Flash Manufacturing and Services PMIs, revealing trends in the nation’s industrial and service sectors. Of particular interest are the MPC Official Bank Rate Votes, offering glimpses into the Bank of England’s stance on interest rates.

These events, alongside US releases like Unemployment Claims, Philly Fed Manufacturing Index, and Existing Home Sales, provide a comprehensive view of global economic sentiment.

With figures like the Eurozone’s Flash Manufacturing PMI hovering around 47.0 and the UK’s Flash Services PMI at 53.8, market participants await these releases with heightened anticipation, poised for potential market volatility and directional cues.

US Dollar Index (DXY)

Dollar Index

The Dollar Index experienced a modest decline of 0.12%, settling at 103.271. Positioned just below its pivot point of 103.330, the index shows signs of bearish pressure yet hovers near a potential turning point.

Resistance levels at 103.625, 103.987, and 104.295 may pose challenges for upward movement, while support at 103.016, 102.682, and 102.365 offers a cushion against further declines.

The 50-Day and 200-Day EMAs, at 103.443 and 103.539 respectively, hint at a near equilibrium in market sentiment. Overall, the Dollar Index’s future direction hinges on its ability to surpass the 103.330 pivot, with a move above potentially signaling a shift towards bullish momentum.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair notched a slight gain of 0.12%, trading at 1.0934, demonstrating a cautious upward trend within a tightly watched technical framework. With the pivot point set at 1.0942, the currency pair is at a critical juncture, where its immediate future direction hangs in the balance. Resistance levels at 1.0964, 1.0981, and 1.1005 delineate the potential hurdles that could cap further advances.

Conversely, support at 1.0907, followed by 1.0873 and 1.0838, underscores key areas where declines may find a floor. The 50-Day and 200-Day Exponential Moving Averages, at 1.0891 and 1.0865 respectively, suggest a burgeoning bullish sentiment, yet the pair remains in a delicate position.

Breaching the 1.0942 mark could signify a shift towards a stronger bullish outlook, whereas failure to overcome this threshold might indicate lingering bearish pressures.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair edged slightly higher by 0.06%, trading at 1.27930, as it flirted with the pivot point at 1.2796. This level is pivotal for determining the pair’s short-term direction, with immediate resistance mapped at 1.2824, 1.2864, and 1.2894.

These points could challenge further bullish momentum. Support levels at 1.2757, 1.2717, and 1.2668 provide potential safety nets against declines. The technical landscape, underscored by the 50-Day and 200-Day Exponential Moving Averages at 1.27473 and 1.27059 respectively, hints at a cautiously optimistic outlook.

However, the market remains in a precarious balance; a decisive move above 1.2796 may signal a bullish shift, while failure to breach this threshold could sustain bearish pressures.

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.