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USD, EUR, GBP Price Forecast: German GDP and UK Confidence Shape Currency Dynamics

By:
Arslan Ali
Published: Feb 23, 2024, 08:52 UTC

Key Points:

  • German GDP contraction at -0.3% highlights Eurozone's economic hurdles, affecting EUR/USD outlook.
  • UK's GfK Consumer Confidence at -21 underlines consumer pessimism, influencing GBP/USD dynamics.
  • Upcoming German ifo Business Climate Index and EU meetings set to impact Euro's trajectory.
US Dollar Index and FOMC

In this article:

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

On Friday, the US Dollar trading neutrally at 103.945 in anticipation of upcoming economic events from Europe. Noteworthy, the absence of major news from the USA leaves room for European economic indicators to steer market sentiment in the coming sessions.

Previously released data revealed a contraction in the German Final GDP at -0.3%, aligning with expectations and underscoring the economic challenges faced by the Eurozone’s largest economy.

In the UK, GfK Consumer Confidence slightly improved but remained in negative territory at -21, reflecting persistent consumer pessimism amidst economic uncertainties.

Events Ahead

The German ifo Business Climate Index, expected at 85.5, will offer fresh insights into business sentiment within Europe’s economic powerhouse. Additionally, speeches by German Buba President Nagel and various EU meetings including the ECOFIN and Eurogroup meetings are on the agenda, potentially impacting the Euro’s performance.

For the GBP/USD, focus remains on broader market dynamics and any Brexit-related developments, with the UK’s economic indicators playing a crucial role in shaping the currency pair’s trajectory.

US Dollar Index (DXY)

Dollar Index
Dollar Index

The Dollar Index (DXY)’s pivot point stands at 104.149. In today’s session, resistance levels are earmarked at 104.417, 104.680, and 104.987, delineating potential ceilings the index may encounter.

Conversely, support levels are established at 103.667, 103.318, and 102.911, offering floors that could stabilize declines. The 50-day and 200-day Exponential Moving Averages, at 104.126 and 103.772 respectively, suggest a slight bullish bias.

Given these parameters, the DXY exhibits a bullish outlook as long as it remains above 103.667, highlighting an underlying strength in the U.S. dollar against a basket of currencies.

EUR/USD Technical Forecast

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

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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