Highlights
- US Dollar grapples with fiscal challenges; Federal Budget Balance reflects at -21.9 billion USD.
- GBP’s resilience shines with robust labor indicators; Claimant Count and Earnings Index bolster strength.
- Upcoming CPI reports and EU Economic Sentiments set to influence USD and EUR’s near-term trajectories.
Economic Events Shape Forex Outlook; Eyes on US CPI
The US Dollar recently felt the impact of a Federal Budget Balance reported at -21.9 billion USD, a figure that underscores the nation’s fiscal challenges. In contrast, the GBP has shown signs of economic resilience, highlighted by a Claimant Count Change of 14.1K and an Unemployment Rate at 3.8%, alongside an Average Earnings Index 3m/y increase of 5.8%.
These figures suggest a robust labor market in the UK, potentially strengthening the GBP against its peers.
Events Ahead
Anticipated events include the US Core CPI and CPI monthly reports, forecasted at 0.3% and 0.2% respectively, with year-over-year CPI expected at 2.9%. These indicators hint at ongoing inflationary pressures that could influence Federal Reserve policies.
Across the pond, the EUR zone awaits the ZEW Economic Sentiment, with the European figure at 20.1 and the German sentiment at 17.4. Furthermore, the EU Economic Forecasts loom large, serving as a barometer for the continent’s economic health and policy direction. A hawkish tilt in these forecasts could lend strength to the EUR.
US Dollar Index (DXY)
On February 13, the Dollar Index witnessed a slight increase of 0.04%, reaching 104.166. This upward move positions it above the pivot point of 103.956, signaling a bullish trend. Resistance levels are set at 104.191, 104.600, and 104.853, indicating potential challenges for further upward movement.
Support levels are identified at 103.750, 103.550, and 103.321, providing a safety net against significant downturns.
The 50-day and 200-day Exponential Moving Averages, at 104.004 and 103.466 respectively, reinforce the bullish sentiment, suggesting the Index’s strength above the pivot point.
EUR/USD Technical Forecast
The EUR/USD pair is trading slightly lower at 1.07711, marking a marginal decline of 0.01% as of February 13. This subtle movement places the currency pair in a cautious position, hovering just below the pivot point of 1.07892. Resistance levels are identified at 1.08097, 1.08297, and 1.08583, while support is found at 1.07640, followed by 1.07430 and 1.07241.
The technical landscape, illuminated by the 50-day and 200-day Exponential Moving Averages (EMAs) at 1.07862 and 1.08466 respectively, suggests a bearish inclination below the pivot point.
This outlook is underpinned by the currency’s inability to breach the immediate resistance, hinting at potential downward pressure in the near term.
GBP/USD Technical Forecast
The GBP/USD exchange rate slightly declined by 0.07%, settling at 1.26196. This movement positions the currency pair below its pivotal mark of 1.26444, indicating a bearish sentiment in the short term.
Resistance is anticipated at 1.26743, 1.27180, and 1.27710, with support levels emerging at 1.26144, 1.25772, and 1.25171.
The 50-day and 200-day Exponential Moving Averages, at 1.26308 and 1.26536 respectively, further substantiate the bearish outlook, suggesting that GBP/USD might face downward pressure should it remain under the pivot point.
For a look at all of today’s economic events, check out our economic calendar.
