EUR/USD, GBP/USD, DXY Forecast: Will US Data Swing Dollar from 105.50?

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Published: Jun 17, 2024, 07:05 GMT+00:00

Key Points:

Eurozone trade surplus beats expectations, while UK inflation expectations cool.
US dollar finds support in weaker import prices and falling consumer sentiment.
G7 meetings and US manufacturing data are key events to watch today.

Last Friday was a mixed bag for the major currencies. European data mostly surprised to the upside, with the Eurozone trade balance widening to €19.4 billion, beating expectations of €17.2 billion. However, the Italian trade balance slightly missed forecasts, coming in at €4.81 billion instead of €4.30 billion.

The pound took a hit as UK consumer inflation expectations cooled to 2.8%, fueling concerns about the Bank of England’s tightening path. Meanwhile, the US dollar saw a boost from weaker-than-expected import prices (-0.4%) and a drop in consumer sentiment to a six-month low of 65.6.

Events Ahead

Today, the market’s focus will shift towards the G7 meetings and the release of the US Empire State Manufacturing Index. With expectations set at -15.6, any positive surprise could further bolster the dollar.

Traders will be closely watching how the G7 discussions unfold, as any hints about trade policies or economic cooperation could impact currency markets.

US Dollar Index (DXY)

Dollar Index

The Dollar Index rose 0.30% on Monday, reaching $105.517. Despite this uptick, the technical outlook remains bearish below the immediate resistance level of $105.816. A decisive move above this level could signal a shift in momentum, potentially pushing the index towards $106.004 and $106.189.

However, if the index fails to break through this resistance, it could retreat towards the pivot point at $105.433 and potentially further down to $105.216 and $105.031.

The 50-day EMA currently sits below the 200-day EMA, suggesting a potential bearish crossover. Traders should closely monitor the $105.816 level for a breakout or breakdown.

EUR/USD Technical Forecast

EUR/USD Price Chart – Source: Tradingview

The EUR/USD fell on Monday, trading at $1.07023, down 0.32%. Despite this decline, the technical outlook remains bullish above the pivot point of $1.06812. A break above this level could signal further upward momentum, potentially targeting $1.07364 and $1.07747.

However, a sustained move below $1.06812 could trigger a sharp reversal, leading to a decline towards $1.06498 and $1.06242. The 50-day EMA currently sits below the 200-day EMA, suggesting a potential bearish crossover.

Traders should closely monitor the $1.06812 pivot point for potential shifts in the market sentiment.

GBP/USD Technical Forecast

GBP/USD Price Chart – Source: Tradingview

The GBP/USD fell on Monday, trading at $1.26838, down 0.61%. However, the technical outlook suggests a potential bullish reversal above the immediate support level of $1.26556.

A break above this level could signal renewed upward momentum, potentially targeting $1.26953 (pivot point), $1.27217 and $1.27552. However, a failure to hold above $1.26556 could trigger further selling pressure, pushing the pair towards $1.26349 and $1.26132.

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

About the Author

Bob MasonChief Crypto Boss

TEST 30 He has written extensively for a broader audience and his current focus is on developments relating to the financial markets including, but not limited to currencies, commodities, alternative asset classes, and global equities.