EUR/USD, GBP/USD, DXY Price Forecast: Euro Struggles Post-PMI, DXY Targets $101.75
Market Overview
The EUR/USD pair saw some volatility on Tuesday following mixed data from France and Germany. France’s Flash Manufacturing PMI dropped to 42.1 from the previous 44.0, while the Services PMI rose slightly to 50.2.
Similarly, Germany’s Manufacturing PMI also fell to 42.1 from 43.2, but its Services PMI showed a slight decline to 52.3. These figures highlight ongoing economic challenges in the Eurozone, causing the euro to struggle against the US dollar.
Events Ahead
Looking ahead, traders are keenly watching Thursday’s data. The GBP/USD could see movement as the UK’s Flash Manufacturing PMI is expected to remain steady at 52.1, while the Services PMI might inch up to 52.8.
In the US, unemployment claims are forecast to rise slightly to 232K, and Flash Manufacturing PMI is expected to dip to 49.5, signalling a potential slowdown.
These developments, coupled with the Jackson Hole Symposium, could drive further fluctuations in the Dollar Index (DXY).
US Dollar Index (DXY)
The Dollar Index (DXY) is currently navigating a bearish channel, with resistance holding near the $101.321 pivot point. This channel has been capping upside momentum, and the index’s movement within this range suggests a cautious market.
A breakout above the $101.769 resistance could signal a shift in sentiment and potentially drive the index higher towards $102.044 and $102.264.
On the downside, immediate support lies at $101.064, with further support levels at $100.826 and $100.619. The 50-day EMA at $102.432 and the 200-day EMA at $103.544 reflect a broader bearish trend.
Bearish below $101.321, but a breakout above this level could shift bias towards the upside.
EUR/USD Technical Forecast
The EUR/USD pair is showing signs of potential bearish movement following the appearance of a hanging man candlestick pattern on the 4-hour chart. This pattern often signals a possible reversal, and we could see selling pressure if the pair breaks below the pivot point at $1.11315.
Immediate support is found at $1.10869, with further support levels at $1.10625 and $1.10405. The 50-day EMA at $1.10159 and the 200-day EMA at $1.09130 suggest a strong underlying bullish trend, but this could be tested if the hanging man pattern plays out.
Bearish below $1.11315, with the potential for further downside. A break above this level could reignite bullish momentum.
GBP/USD Technical Forecast
The GBP/USD pair shows signs of potential bearish movement as it trades just below the pivot point at $1.30532. The appearance of a hanging man candlestick pattern, accompanied by a series of Doji candles, suggests that the bullish momentum could be fading, with a potential for a bearish correction.
Immediate support is at $1.29915, with further support levels at $1.29544 and $1.29243. The 50-day EMA at $1.29007 and the 200-day EMA at $1.2833 indicate a strong underlying trend, but these could be tested if the selling pressure increases.
Bearish below $1.30532, but a break above this level could reintroduce a bullish bias.