US Dollar Forecast: Gains Ahead? Non-Farm Payrolls Impact on Gold, GBP/USD, EUR/USD Outlook

US Dollar Strengthens; Key US Jobs Data and Gold Outlook

The U.S. dollar gained strength after unemployment claims dropped to 216K, beating expectations of 229K, signaling a resilient labor market. However, the Employment Cost Index rose only by 0.8%, slightly below forecast, suggesting wage growth may be softening.

This week’s upcoming Non-Farm Payrolls and Average Hourly Earnings data could influence Fed policy, potentially affecting both the dollar and gold.

A stronger dollar and stable interest rates often put pressure on gold prices, as investors seek higher-yielding assets. Should employment data disappoint, gold may find support as investors seek safe-haven assets amid economic uncertainty.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at $104.98, up 0.09%, while GBP/USD is down slightly at $1.28961. The DXY is hovering near a pivot point of $104.05; staying below this level suggests a bearish bias, with immediate support at $103.85 and $103.73.

A break above $104.05 could shift momentum upward, targeting resistance at $104.19 and $104.33.

For GBP/USD, the pivot at $1.29026 is key. If it remains below this level, further declines are likely, with support at $1.28633 and $1.28433. However, a push above $1.29026 could target $1.29207 and $1.29391.

Both assets are in tight ranges, with the dollar’s upward potential capped by a downward channel and GBP/USD constrained by a double top near $1.3015.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,752.67, up 0.33% for the session, and hovers near the key pivot of $2,759. A break above $2,760 could push prices to resistance levels at $2,774, $2,790, and $2,807.

However, if prices fall below $2,746, support may come in at $2,732 and $2,718. The 50-day EMA at $2,759 reinforces this pivot, making it a critical level to watch for directional cues.

GBP Softened as Housing Prices Miss Expectations, PMI Steady

The British pound (GBP) softened after Nationwide HPI data showed just a 0.1% increase, missing the 0.3% forecast. Final Manufacturing PMI remains steady at 50.3, offering limited support to Sterling.

GBP/USD Technical Analysis

GBP/USD is trading at $1.28961, slightly down by 0.02% as it hovers near a key pivot at $1.29026. This pivot point is crucial; staying below it keeps a bearish outlook, with immediate support at $1.28633 and further levels at $1.28433 and $1.28229.

However, if GBP/USD breaks above $1.29026, it could shift bullish, targeting resistance at $1.29207 and $1.29391.

The 50-day EMA at $1.29497 aligns with resistance, adding to its significance. Essentially, the pound’s direction hinges on the pivot — a move above signals potential gains, while staying below suggests continued downside.

Euro Holds Steady Amid Mixed Inflation and Job Data

The Euro saw mixed movement as German retail sales beat expectations at 1.2%, while Core CPI held steady at 2.7% y/y. Italy’s unemployment rate improved slightly to 6.1%, but the Eurozone unemployment rate remained flat at 6.3%.

With French and Italian bank holidays on Friday, European market activity is expected to be limited, shifting focus to U.S. data for further market cues.

EUR/USD Technical Forecast

EUR/USD is trading at $1.08746, down 0.08% for the session, hovering around a key pivot point at $1.08749. This level is crucial; if the euro holds above it, we could see bullish momentum with resistance targets at $1.08879 and $1.09010.

However, if it breaks below, immediate support is expected at $1.08455, followed by $1.08268. The 50-day EMA at $1.08454 aligns with support, reinforcing its importance.

A move above the pivot signals strength, while a drop could lead to sharp selling pressure. For now, EUR/USD’s outlook hinges on this critical pivot area.