US Dollar Price Forecast: Presidential Election Uncertainty Drives Volatility – Gold, GBP/USD, and EUR/USD Outlook

USD and Gold in Focus Amid Key Economic Data and Elections

The U.S. dollar is under close watch as recent economic data reveals a dip in Factory Orders to -0.5%, below the forecasted -0.4%. Looking ahead, traders are bracing for the Trade Balance report, which is expected to show a significant deficit of -83.8 billion.

Key PMI data, along with the highly anticipated U.S. presidential and congressional elections, will likely create market volatility. Watch for gold’s reaction if the U.S. dollar weakens, especially with PMI reports and election results looming.

US Dollar Index (DXY) – Technical Analysis

The Dollar Index (DXY) is hovering around $103.81, slightly down by 0.06%, as it tests critical support levels amid a downward trendline. With a pivot point set at $103.94, DXY remains bearish as long as it trades below this level.

Immediate resistance is seen at $104.04, followed by $104.16 and $104.34, marking a potential shift to bullish if broken. On the downside, support lies at $103.70, with deeper levels at $103.58 and $103.43.

The 50-day EMA at $103.96 reinforces near-term resistance, while the 200-day EMA at $103.69 offers moderate support. Watch for a move above $103.94 to signal any possible bullish reversal.

Gold – Technical Analysis

Gold (XAU/USD) trades around $2,737.16, down 0.02%, testing a key pivot at $2,739.67. A descending triangle on the 4-hour chart suggests bearish potential if it breaks below.

Immediate support lies at $2,731.98, with further levels at $2,724.73 and $2,717.08.

Holding above $2,739 could push gold toward $2,748.48 and beyond, but EMAs near $2,742 cap gains.

GBP Steady with Weak Retail Sales and PMI in Focus

The British pound (GBP) is facing downward pressure as the latest BRC Retail Sales Monitor showed a sharp slowdown, rising only 0.3% year-over-year, below the 1.4% forecast and previous 1.7% growth.

Traders are now eyeing the upcoming Final Services PMI, expected at 51.8, and the 10-year bond auction.

Weak retail data, combined with bond yield shifts, could drive further volatility for GBP as markets assess the strength of the UK economy.

GBP/USD Technical Analysis

GBP/USD is trading at $1.29754, up 0.14%, showing strength above the key pivot at $1.29475. This pivot acts as a critical support, and as long as the pair holds above it, the outlook remains cautiously bullish.

Immediate resistance is at $1.29980, with further targets at $1.30194 and $1.30429, signaling potential for upward movement. On the downside, support levels are set at $1.29236, $1.28875, and $1.28539.

The 50-day EMA at $1.29566 reinforces short-term support, while the 200-day EMA at $1.30004 could limit gains. For now, a sustained break below $1.29475 may indicate a shift to a bearish tone.

Euro Slips Amid Weak French Data and Rising Unemployment

The euro (EUR) faced pressure today as French government budget balance widened to -173.8 billion, slightly below the previous -171.9 billion. Additionally, French industrial production declined by -0.9%, worse than the expected -0.5%.

Meanwhile, Spanish unemployment increased by 26.8K, marginally above the forecast of 26.5K, adding concerns over labor market weakness.

Traders are now focusing on the ECOFIN meetings for potential fiscal policy insights that may impact the euro’s trajectory.

EUR/USD Technical Forecast

EUR/USD is currently trading at $1.08887, marking a modest 0.11% gain on the day, as it navigates near a crucial pivot point at $1.08718. This level is key for the pair, as holding above it could drive further bullish momentum.

Immediate resistance is at $1.09140, with additional levels to watch at $1.09360 and $1.09542. Support remains firm at $1.08453, with lower levels at $1.08296 and $1.08076.

The 50-day EMA at $1.08665 and 200-day EMA at $1.08716 align closely, reinforcing upward momentum. If EUR/USD breaks below $1.08718, though, we could see a swift shift toward a bearish trend.