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US Dollar Price Forecast: European GDP and US CB Consumer Confidence in Focus

By:
Arslan Ali
Updated: Jan 30, 2024, 07:55 UTC

The US Dollar Index edges up to 103.500 while key economic events like European GDP and US Consumer Confidence remains in highlights.

Dollar

In this article:

Highlights

  • US Dollar Index shows modest rise to 103.500; bullish trend likely above pivot at 103.398 amid key resistance levels.
  • EUR/USD continues downward, trading at 1.08138; bearish sentiment reinforced by technical indicators and downward channel pattern.
  • GBP/USD observes slight decline to 1.26846; neutral to bearish outlook with potential for downward movement below pivot at 1.27140.

Shifting Dynamics in Forex: Key Economic Indicators Ahead

The US Dollar witnessed an uptick of 0.12% during the Asian session, trading at 103.583, setting the tone for the day’s market dynamics. For the EUR/USD pair, recent data releases have painted a mixed economic picture. French Consumer Spending showed a modest increase of 0.3%, slightly underperforming against the forecast of 0.6%. The French Flash GDP remained stagnant at 0.0%, aligning with expectations but showing no growth from the previous quarter’s -0.1%.

The GBP/USD is mostly unchanged as BRC Shop Price Index year-over-year marked a rise to 2.9%, indicating a softer increase compared to the previous 4.3%.

Events Ahead

Looking ahead, pivotal data releases are lined up, including the Spanish Flash CPI year-over-year and GDP quarter-over-quarter, with expectations set at 3.0% and 0.2% respectively. The Italian Prelim GDP and German Prelim GDP data are also due, with forecasts pointing towards a contraction in the German economy.

Furthermore, the broader Eurozone’s Prelim Flash GDP is anticipated to mirror the previous quarter’s figure of -0.1%, suggesting continued economic challenges.

Additionally, significant attention is drawn towards the German Buba President Nagel’s speech at the New Economy Forum in Berlin, which could impart crucial insights affecting the Euro.

In the UK, attention is focused on the M4 Money Supply, Mortgage Approvals, and Net Lending to Individuals, with Mortgage Approvals expected to show an increase.

Furthermore, significant US economic data is on the horizon, with the CB Consumer Confidence index projected at 114.2, up from 110.7, and JOLTS Job Openings anticipated at 8.73 million, slightly down from 8.79 million.

US Dollar Index (DXY)

Dollar Index
Dollar Index

In the 4-hour chart, Dollar Index’s pivot point stands at 103.398 along with resistance levels that is observed at 103.748, extending to 104.037 and 104.280, while support levels are situated at 103.141 and further down at 102.760 and 102.385.

The 50-Day and 200-Day EMAs at 103.343 and 103.033, coupled with an ascending triangle pattern, suggest a bullish outlook. However, a double-top formation near 103.748 poses a challenge, with a breakthrough potentially intensifying the bullish momentum.

Overall, the trend for the Dollar index remains bullish, particularly if it stays above 103.398.

EUR/USD Technical Forecast

EUR/USD Price Chart - Source: Tradingview
EUR/USD Price Chart – Source: Tradingview

As of January 30, the EUR/USD pair is demonstrating a continued decline, trading at 1.08138, a drop of 0.16%. The 4-hour chart indicates a critical juncture with the pivot point at 1.08360. The pair faces resistance at 1.08569, 1.08863, and 1.09342, each presenting a potential ceiling to upward movements.

On the downside, support is noted at 1.07813, followed by 1.07413 and 1.06945, offering potential relief points against the downtrend. The 50-Day and 200-Day EMAs, at 1.08661 and 1.08962 respectively, are positioned above the current price, reinforcing the bearish sentiment. The prevailing downward channel pattern suggests a sustained selling trend.

Consequently, a sell trade below $1.0836 could be advantageous for traders. Overall, the trend for EUR/USD is bearish, especially below the $1.0836 threshold.

GBP/USD Technical Forecast

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart – Source: Tradingview

The GBP/USD pair is currently navigating a downward path, trading at 1.26846, which translates to a 0.20% decrease. Analyzing the 4-hour chart, the currency pair is facing a pivotal point at 1.27140. It encounters resistance at 1.27424, 1.27763, and 1.28139, where selling pressures are likely to intensify. Conversely, support levels are found at 1.26615, 1.26369, and 1.25964, potentially offering a buffer against further downward movement.

The technical perspective is shaped by the 50-Day and 200-Day Exponential Moving Averages (EMAs) at 1.27068 and 1.26721, respectively. The positioning of the 50 EMA above the current price indicates a neutral to bearish outlook, while the 200 EMA below the price level gives a slightly bullish signal.

The chart reveals a symmetrical triangle pattern, suggesting a balanced market sentiment. However, the recent appearance of a tweezer top candlestick pattern in the 4-hour chart could foreshadow a potential decline. This observation may lead to considering a sell trade if the GBP/USD pair dips below the $1.2714 level.

Overall, the trend for GBP/USD leans towards bearish, particularly if it remains below the $1.2714 threshold.

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

About the Author

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.

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