EUR/USD, GBP/USD, DXY Price Forecast: : US CPI Sets Tone, DXY Faces 102.90 Pivot

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Published: Mar 12, 2024, 07:38 GMT+00:00

Key Points:

German CPI holds at 0.4%, indicating stable inflation; UK job data reflects subtle market changes.
US CPI forecast suggests nuanced inflation landscape; Federal Budget revision highlights fiscal concerns.
Dollar Index hints at bearish trend below pivot point; EUR/USD and GBP/USD show resilience, underpinned by EMAs.

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

During the early European session, the German Final Consumer Price Index (CPI) maintained a steady pace at 0.4% month-on-month, reflecting stable inflationary pressures within Europe’s largest economy.

This steadiness is mirrored in the unemployment and wage figures out of the UK, with the Claimant Count Change showing a slight increase to 16.8K from 20.3K, suggesting modest shifts in the job market.

The Average Earnings Index decelerated slightly to 5.6%, indicating a softening in wage growth. Meanwhile, the unemployment rate nudged up to 3.9%, a minimal rise that underscores the resilience of the UK labor market.

Events Ahead

Looking ahead, a flurry of crucial data from the US looms large. The Core CPI is expected to show a slight decrease to 0.3% from 0.4% month-on-month, potentially indicating easing inflationary pressures.

Concurrently, the headline CPI is forecasted to tick up to 0.4% from 0.3%, juxtaposing the core figures and suggesting a nuanced inflationary landscape. The year-on-year CPI remains unchanged at 3.1%, encapsulating a broader view of inflation over time.

Additionally, a significant revision in the Federal Budget Balance to -298.5B from -21.9B will demand attention, alongside the 10-year Bond Auction, which could offer insights into investor sentiment and future interest rate directions.

US Dollar Index (DXY)

Dollar Index

The Dollar Index (DXY) experienced a slight dip of 0.02%, trading at 102.824. A critical examination reveals that the index is testing waters below a pivot point of 102.906, suggesting a bearish sentiment under this threshold. Immediate resistance levels are identified at 103.166, 103.428, and 103.634, providing potential upside barriers.

Conversely, support is found at 102.517, with further cushions at 102.239 and 101.912 should the index slide further. The 50-day and 200-day Exponential Moving Averages (EMAs) at 103.262 and 103.618, respectively, underscore a broader bearish trend.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair has shown a modest uptick of 0.10%, reaching a price point of 1.09363. It hovers above the pivot point at 1.09336, which acts as the current fulcrum for its trading bias.

The pair encounters immediate resistance at 1.09540, with further barriers at 1.09803 and 1.09971. Conversely, support lies at 1.09189, followed by 1.09036 and 1.08816, marking potential fallback positions.

The 50-day and 200-day EMAs, at 1.08931 and 1.08494 respectively, support a bullish sentiment as long as the price remains above the pivot.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair notched a slight increase of 0.04%, trading at 1.28187, positioned above a crucial pivot point at 1.27998. This pivot delineates the threshold between bullish and bearish domains. Resistance levels are mapped out at 1.28450, 1.28932, and 1.29284, serving as potential ceilings to upward movements.

Conversely, support lies at 1.27638, with subsequent floors at 1.27229 and 1.26810, marking zones where buying interest may rejuvenate. Both the 50-day and 200-day Exponential Moving Averages (EMAs) at 1.27549 and 1.26829, respectively, underpin a bullish outlook, bolstered by an upward trendline.

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.