US Dollar Price Forecast: DXY Holds 100 as Traders Awaits Nonfarm (NFP) – Are GBP/USD and EUR/USD Sinking?

Dollar Holds Near 100 as NFP Reinforces Fed Outlook

The US Dollar Index is trading just a whisker away from that 100.00 level now, thanks in part to dollars being sought out as a safe harbour in these uncertain times, all driven by the near-continuous tensions in the Middle East and the nagging worries over inflation caused by climbing energy prices. And at the root of all this, the ongoing uncertainty surrounding the Strait of Hormuz has investors keeping their money firmly in the dollar, unwilling to take on any extra risk.

Markets are turning their focus to the March nonfarm payrolls report that’s due to come out later today – and its all looking to show an uptick of around 60,000 to 65,000 jobs after a pretty dismal February. The unemployment rate is expected to stay steady at 4.4 percent and wages are still looking pretty strong.

The outcome will be super important for how people are thinking about the Fed. We could see a stronger jobs number confirming their ‘higher for longer’ policy stance, or a weaker jobs report might have people starting to talk about rate cuts again – and that would put downward pressure on the dollar.

Euro and Pound Make a Tiny Comeback but Still Face Some Big Hurdles

The Euro and British pound have managed to stabilise so far today, with their release later waiting in the balance – but all that’s holding them up are the jitters about energy driven inflation and the persistent softness of the economy.

Dollar Index Holds Trend Support as Momentum Stabilizes

The US Dollar Index ($99.97) is just treading water above that little uptrend line just below $99.30, still pointing upwards even after a recent stumble. The price is kicking around the 50 day moving average at the moment, while the 200 day moving average near $98.90 is still putting a floor under things.

Those last few candles showed a bit of indecision with some pretty small candle bodies, which suggests that sellers are perhaps getting a bit of a breather after getting knocked back down from that $100.60 resistance level.

If price manages to finally break above $100.60 we could see that upward momentum pick up again and head towards $101.12, but a drop below $99.30 would see things head in the opposite direction and potentially retest $98.50.

Trade idea: Buy above $100.60 with a stop loss below $99.30 and target $101.10.

GBP/USD Consolidates Below Fib Levels Within Downtrend

GBP/USD ($1.3236) is still caught in a downtrend, with price stuck firmly below a couple of key Fibonacci retracement levels. It just bounced off the $1.3235 support level after a pretty sharp fall from the $1.3318 – $1.3356 resistance zone.

And to make matters worse – that 50 day moving average is capping any short-term rally we might see, while the 200 day moving average is still sitting higher – putting additional downwards pressure on things.

The RSI is telling us that at the moment the momentum is sort of ‘meh’ and leaning slightly bearish. If price does manage to break through that $1.3235 support we could see losses head towards $1.3159, while a recovery above $1.3318 would start to make things look a bit more positive again.

Trade idea: Sell below $1.3235 with a stop loss above $1.3318 and target $1.3159.

EUR/USD Stalls Below Supply Zone as Sellers Regain Control

EUR/USD ($1.1544) is still having trouble pushing past that big supply zone just above $1.1630 – $1.1670, with price starting to struggle to keep moving upwards. It’s trading near the 50 day moving average, but still stuck below the 200 day moving average – which is a bit of a headwind if you ask me.

Looking at the charts we can see that price just got knocked back from recent highs, and has since consolidated near $1.1510 support.

But if price does get knocked through that $1.1510 support we could see a more significant drop towards $1.1457, while a recovery above $1.1600 would start to make things look a bit more positive again.

Trade idea: Sell below $1.1510 with a stop loss above $1.1600 and target $1.1457.