US Dollar Forecast: Core PPI Data and FOMC Speeches Impact GBP/USD and EUR/USD Outlook

Market Overview

The US Dollar remains steady as traders focus on upcoming economic events. Key data includes the Core Producer Price Index (PPI), forecasted at 0.2%, which could signal inflationary trends critical for Federal Reserve decisions. The Federal Budget Balance is also in focus, expected to improve to -$67.6B from the prior -$366.8B, offering insight into fiscal health.

Additionally, speeches by FOMC members Schmid and Williams may provide further clarity on monetary policy direction. These events are likely to shape short-term market sentiment, influencing the Dollar Index’s trajectory and broader forex market dynamics.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at 109.471, down a modest 0.04%, as it consolidates within an upward channel. The pivot point at $109.403 is a critical threshold—holding above this level maintains the bullish momentum. Immediate resistance is seen at $109.988, with a higher target at $110.456.

On the downside, support lies at $109.068, followed by a deeper level at $108.558. The 50-day EMA at $109.075 underpins short-term support, while the 200-day EMA at $107.745 confirms the broader uptrend.

A break above $109.988 could signal further strength, pushing the index toward fresh highs. However, a decline below $109.403 may trigger a sharper correction, potentially testing lower support levels.

GBP/USD Technical Analysis

The GBP/USD pair is trading at 1.22192, up 0.18%, as buyers attempt to regain ground following recent declines. Despite the slight recovery, the pair remains below the pivot point at $1.22494, indicating that bearish sentiment prevails. Immediate resistance lies at $1.23618, with the next hurdle at $1.24926.

On the downside, support levels are positioned at $1.20376 and $1.19397, marking critical areas for further declines.

The 50-day EMA at $1.23391 reinforces near-term resistance, while the 200-day EMA at $1.25455 confirms the broader bearish trend. A sustained move below $1.22494 may trigger renewed selling pressure, aligning with the downward trendline. Conversely, a break above could open the door for a bullish recovery.

EUR/USD Technical Forecast

The EUR/USD pair is trading at 1.02584, up 0.14%, as buyers attempt to regain control following recent bearish pressure. However, the pair remains below the pivot point at 1.02781, signaling limited upside unless a breakout occurs.

Immediate resistance is seen at 1.03598, with a stronger barrier at 1.04431. On the downside, support levels are at 1.01771 and 1.01068, both crucial for maintaining stability.

The 50-day EMA at 1.03029 suggests near-term resistance, while the 200-day EMA at 1.04339 underscores the broader bearish trend. A sustained move below 1.02781 could trigger a downward move, aligning with the prevailing downward trendline. Conversely, breaking above this pivot may spark bullish momentum.