Market Overview
The US dollar experienced mixed signals yesterday. The PPI figures were softer than expected, declining 0.2% month-over-month compared to the forecasted 0.1% increase. Jobless claims, however, came in lower than predicted at 242K, against expectations of 255K.
These conflicting signals caused uncertainty surrounding the dollar’s direction. Treasury Secretary Yellen’s speech offered no clear market guidance, and the results of the 30-year bond auction (4.40%) were within the expected range.
Events Ahead
Today, focus shifts to European economic data. French final CPI figures and Italy’s trade balance data will provide insight into the Eurozone’s economic condition.
In the UK, consumer inflation expectations, currently at 3.0%, will be closely monitored as they can significantly sway the Bank of England’s policy decisions. Meanwhile, the eurozone’s overall trade balance of 17.0B will provide a broader perspective on the region’s economic activity.
In the US, import prices and preliminary consumer sentiment data from the University of Michigan will be key data points. These figures often trigger market reactions.
Lastly, speeches from ECB President Lagarde and FOMC Member Cook will be scrutinized for any hints about future monetary policy decisions.
US Dollar Index (DXY)
Dollar Index
The Dollar Index saw a slight uptick to 105.418. However, it displays a bearish pattern below the double top at 105.466. A decisive move above this level could invalidate the bearish outlook and signal the potential for further gains, with the next resistance levels at 105.655 and 105.907.
Conversely, a sustained move below 105.466 could confirm the bearish bias, with immediate support at 105.184 and subsequent support levels at 104.890 and 104.616. The 50-day EMA is currently at 105.001, while the 200-day EMA sits at 104.810.
EUR/USD Technical Forecast
EUR/USD Price Chart – Source: Tradingview
The EUR/USD pair edged higher on Friday, trading at $1.07248. Despite this uptick, the overall technical picture for EUR/USD remains bearish below the pivot point of $1.07401. A break above this level could signal a shift in momentum for the currency pair, potentially fueling further bullish sentiment.
Conversely, a sustained move below this point could confirm the bearish bias in EUR/USD, with immediate support at $1.06939. The 50-day EMA currently sits at $1.07967, above the 200-day EMA of $1.080788, suggesting a broader bearish trend in EUR/USD.
GBP/USD Technical Forecast
GBP/USD Price Chart – Source: Tradingview
The GBP/USD dipped on Friday, trading at $1.27331. Despite this, the technical outlook remains bearish below the pivot point of $1.27526. A break above this level could signal a shift in momentum, potentially fueling further bullish sentiment, with the next resistance levels at $1.27855 and $1.28174.
Conversely, sustained trading below $1.27526 could confirm the bearish bias, with immediate support at $1.27053 and subsequent support levels at $1.26731 and $1.26433.
The 50-day EMA currently sits at 1.27579, above the 200-day EMA of 1.26919, suggesting a broader bearish trend.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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