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EUR/USD, GBP/USD, DXY Price Forecast: Steady UK CPI, GBP Poised for a Fall?
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Key Points:
- UK CPI remains steady at 2.0%, indicating no improvement but persistent underlying inflation.
- UK House Price Index (HPI) forecasted to increase to 1.5% from 1.1%.
- Eurozone Final Core CPI and Final CPI expected to remain stable at 2.9% and 2.5%.
During the early European session, the UK’s Consumer Price Index (CPI) year-over-year held steady at 2.0%, meeting expectations but not improving. Core CPI remained at 3.5%, indicating persistent underlying inflation.
Producer Price Index (PPI) inputs showed a decrease of 0.8%, sharper than anticipated, while PPI outputs dipped by 0.3%. Retail Price Index (RPI) aligned with forecasts at 2.9%.
Events Ahead
Upcoming events will significantly impact EUR/USD and the Dollar Index. At 8:30, the UK House Price Index (HPI) year-over-year is expected to increase to 1.5% from 1.1%. For the Eurozone, Final Core CPI and Final CPI year-over-year figures are projected to remain stable at 2.9% and 2.5%, respectively.
The German 30-year bond auction will be a key indicator of investor sentiment in Europe.
In the US, building permits are forecasted at 1.40M, while housing starts are expected to rise slightly to 1.30M from 1.28M. Industrial production in the US is expected to grow by 0.3%, down from the previous 0.9%. The capacity utilization rate is anticipated to dip slightly to 78.5% from 78.7%.
Speeches by FOMC members Barkin and Waller will also be closely watched, alongside crude oil inventory data, which is forecasted to decrease by 0.9M barrels compared to the prior drop of 3.4M.
On the downside, immediate support is noted at $104.050, followed by $103.909 and $103.782, which is critical for maintaining the current trend. Technical indicators show the 50-day Exponential Moving Average (EMA) at $104.397 and the 200-day EMA at $104.912, which provide significant support.
In conclusion, the outlook remains bearish below $104.238, with a break above this level potentially shifting the bias to bullish.
EUR/USD Technical Forecast
The EUR/USD pair is currently trading at $1.09032, showing a slight increase of 0.03%. The pivot point is positioned at $1.08954, serving as a critical support level that, if maintained, suggests a bullish trend. Immediate resistance is identified at $1.09177, followed by additional resistance levels at $1.09388 and $1.09598. These levels represent potential targets if the upward momentum continues.
On the downside, immediate support is found at $1.08752, with subsequent support levels at $1.08594 and $1.08443. The 50-day Exponential Moving Average (EMA) is situated at $1.08827, providing a supportive base for the current price trend. The 200-day EMA is also at $1.08223, which serves as a longer-term support level.
In conclusion, the EUR/USD outlook remains bullish if the price stays above the pivot point of $1.08954. A break below this level could drive a sharp selling trend, while maintaining above it suggests further gains with resistance targets at $1.09177, $1.09388, and $1.09598.
GBP/USD Technical Forecast
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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