US Dollar Forecast: DXY Steady Near 104 Amid FOMC Speeches Ahead

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Updated: Feb 12, 2024, 07:52 GMT+00:00

As the Dollar Index navigates the 103.998 level, upcoming FOMC addresses and BOE Gov Bailey's speech are eagerly anticipated by traders.

Highlights

Dollar Index slightly down at $103.998, with pivotal support at 103.750 and resistance at 104.191.
EUR/USD rises to 1.07968, eyeing resistance at 1.08097 post-German CPI aligning with forecasts at 0.2%.
GBP/USD climbs to 1.26393; BOE Gov Bailey’s upcoming speech could influence pivot point breach at 1.26444.

Upcoming Events Impacting EUR/USD and GBP/USD Forecasts

In today’s financial landscape, the US Dollar Index subtly shifts, currently trading at $103.998, reflecting a slight decrease of around 0.08%. On Friday, the Eurozone witnessed a steady German Final CPI month-over-month, matching forecasts and previous figures at 0.2%, while Italian Industrial Production outperformed expectations with a 1.1% increase compared to the anticipated 0.8%, reversing a prior decline of -1.3%.

Events Ahead

Looking ahead, significant speeches from FOMC members, including “Defining a Bank” by FOMC Member Bowman at the American Bankers Association Conference and FOMC Member Barkin’s address at the Atlanta Economics Club, are poised to influence market sentiment.

Additionally, the Federal Budget Balance announcement is on the horizon, potentially impacting the Dollar’s trajectory.

Across the pond, GBP/USD traders are awaiting remarks from BOE Governor Bailey at Loughborough University, which could provide further direction for the Pound in contrast to the Dollar’s performance.

US Dollar Index (DXY)

Dollar Index

On February 12, the Dollar Index’s pivot point of 103.956, hinting at potential for directional movement. Key resistance levels are identified at 104.191, 104.600, and 104.853, serving as benchmarks for bullish momentum. On the downside, support levels are situated at 103.750, 103.550, and 103.321, which could provide stability in case of further declines.

The proximity of the 50-Day Exponential Moving Average (EMA) at 103.957 to the current price underscores a stable market condition, while the 200-Day EMA at 103.422 offers a broader bullish backdrop.

Considering these technical indicators, the outlook for the Dollar Index leans towards a bullish bias, provided it sustains above the pivotal 103.956 mark.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD pair experienced a slight uptick, trading at 1.07968, marking a 0.13% increase within the last 24 hours. This minor yet positive movement places the currency pair just above its pivot point at 1.07929, indicating a potential for further upward momentum.

Immediate resistance levels are identified at 1.08097, 1.08297, and a more substantial barrier at 1.08648, which the pair needs to breach to confirm a bullish trend. Conversely, support levels at 1.07640, 1.07430, and 1.07241 provide a safety net against potential declines.

The 50-Day Exponential Moving Average (EMA) at 1.07914 closely aligns with the current trading price, suggesting stability, while the 200-Day EMA at 1.08515 serves as a longer-term resistance level. Based on these technical indicators and the currency’s position relative to its pivot point, the EUR/USD outlook remains cautiously optimistic, with a bullish potential if it maintains above the 1.07929 threshold.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair edged higher, trading at 1.26393, marking a modest gain of 0.11%. This slight upward movement positions the pair just below its pivot point of 1.26444, suggesting a nuanced stance in market sentiment.

Resistance levels are set at 1.26743, 1.27180, and 1.27710, challenging the pair to sustain its upward trajectory. Conversely, support is found at 1.26144, followed by 1.25772 and 1.25171, which could cushion any downward shifts.

The proximity of the 50-Day Exponential Moving Average (EMA) at 1.26336 to the current price indicates near-term stability, while the 200-Day EMA at 1.26570 looms as a potential resistance level.

Given these technical indicators, the GBP/USD’s outlook appears to tilt bearish if it fails to breach the 1.26444 pivot, signaling a cautious market approach.

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

About the Author

Arslan AliTechnical Analysis Expert

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.