US Dollar Price Forecast: DXY Rises Despite Fed Rate Cut; Gold, GBP/USD and EUR/USD Outlook

US Dollar Strengthens; Gold Prices Face Pressure

The U.S. dollar strengthened following the Federal Reserve’s recent decision to cut the interest rate from 5% to 4.75%, marking a shift aimed at balancing economic growth and inflation. Additionally, weekly unemployment claims rose slightly to 221,000, adding to the complex economic outlook.

These developments, along with upcoming consumer sentiment data expected on Friday, could sustain dollar demand. Meanwhile, inflation expectations hold steady at 2.7%, indicating the Fed may maintain its cautious approach.

Gold, which often moves inversely to the dollar, is under pressure as the stronger dollar and stable inflation outlook lessen its appeal as a hedge.

Traders are keeping an eye on consumer sentiment data for further insight into USD and gold trends.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is trading at 104.57, up 0.21%, hovering near a key pivot point at 104.65. Holding above this level supports a bullish outlook, with immediate resistance at 104.96 and further targets at 105.21 and 105.44.

On the downside, a move below 104.41 could signal a shift, bringing support into focus at 104.16 and 103.95. The 50-day EMA at 104.45 provides nearby support, while the 200-day EMA at 103.96 underlines a longer-term bullish trend.

Traders are watching these levels carefully, as sustained movement above 104.65 may reinforce buying interest, while a dip below 104.41 could invite sellers.

Gold – Technical Analysis

Gold (XAU/USD) is trading at $2,688.18, down 0.68%, near a key pivot at $2,684.08. Staying below this level could sustain a bearish trend, with support at $2,668.38 and $2,654.34.

A break above may attract buyers targeting $2,696.64 and $2,709.01. The 50-day EMA at $2,706.93 and 200-day EMA at $2,715.41 indicate short-term bearish momentum.

Sterling Steady as BOE Cuts Interest Rate to 4.75%

The Bank of England cut its interest rate from 5.00% to 4.75%, aligning with market expectations as policymakers voted 0-8-1 in favor of the reduction. This adjustment reflects the BOE’s cautious response to inflation pressures and economic uncertainty.

Governor Bailey’s comments following the announcement kept the British pound stable, as he signaled a careful approach to future policy adjustments.

Traders will closely watch Friday’s speech from MPC Member Pill for further insights into the BOE’s strategy on inflation and economic stability.

GBP/USD Technical Analysis

GBP/USD is trading at $1.2945, down 0.31%, and sitting near a key pivot at $1.2941. This level is critical—remaining below it could maintain a bearish trend, with immediate support at $1.2916 and further down at $1.2885.

On the upside, a break above $1.2941 might attract buyers, targeting resistance levels at $1.2966 and $1.3002. The 50-day EMA at $1.2947 and the 200-day EMA at $1.2983 suggest a slight bearish bias in the short term.

Euro Under Pressure as German Output Drops 2.5%

The Euro faces downward pressure following weak data from Germany, where industrial production fell by 2.5%, far below the expected 1.1% drop. Germany’s trade balance also disappointed at €17.0 billion, missing the €20.8 billion forecast.

While French retail sales showed slight growth at 0.5%, other indicators across the Eurozone remain mixed.

Traders are closely watching upcoming Italian industrial production and retail sales data to gauge the Euro’s near-term direction amidst signs of economic weakness in Europe.

EUR/USD Technical Forecast

EUR/USD is trading at $1.0762, down 0.37%, just above a key pivot point at $1.0744. Holding below this level may sustain bearish momentum, with immediate support at $1.0717 and further down at $1.0683.

Conversely, if EUR/USD breaks above $1.0744, it could see bullish interest, targeting resistance at $1.0780 and $1.0810. The 50-day EMA at $1.0801 and the 200-day EMA at $1.0846 suggest a bearish tilt in the short term.