The US Dollar Index (DXY) remains steady at 108.87, as markets brace for significant U.S. economic reports set to be released today. Gold holds firm at $2,632, with investors adopting a cautious approach ahead of the data. Among the key upcoming releases are the Final Services PMI (forecasted at 58.5) and Factory Orders (expected to decline by 0.3%), both of which could influence market sentiment.
Attention will shift to Friday’s crucial economic indicators, including Average Hourly Earnings (forecasted at 0.3%), Non-Farm Employment Change (154,000 expected), and the Unemployment Rate (projected at 4.2%). These data points will be pivotal in shaping expectations for the U.S. Dollar’s trajectory and gold prices, providing important signals for the Federal Reserve’s next moves on monetary policy.
US Dollar Index Faces Crucial Support Level
The US Dollar Index (DXY) is currently trading at 108.87, showing a slight dip of 0.04%. The index is testing a critical support zone near 108.82, which coincides with the upper boundary of a previous consolidation range and the 50-day Exponential Moving Average (EMA) at 108.39.
This support area is key in determining the index’s next movement. A breakdown below this level could send the DXY toward the 108.28 support, with further downside risks targeting the 107.62 mark.
On the upside, immediate resistance is at 109.54, with a potential target at 110.13. A sustained break above these levels could reignite bullish momentum. Additionally, the 200-day EMA at 107.13 offers deeper structural support.
Gold Faces Bearish Pressure, Key Resistance Levels in Focus
Gold (XAU/USD) remains at $2,632.27, under bearish pressure after failing to break the resistance at $2,662.26. Immediate support for gold is found at $2,612.14, with stronger support at $2,583.80. The 50-day EMA at $2,632.77 provides near-term resistance, while the 200-day EMA at $2,641.67 limits broader upside potential.
For gold to regain upward momentum, bulls will need to push above $2,642.17. However, a descending trendline continues to apply downward pressure, suggesting a cautious outlook in the near term.
Sterling Weakens as UK Economic Data Disappoints
The British Pound (GBP) faced headwinds on Friday, following weaker-than-expected economic data from the UK. The M4 Money Supply remained flat at 0.0%, falling short of the 0.1% forecast. Additionally, Mortgage Approvals dropped to 66K, missing the forecasted 69K, while Net Lending to Individuals fell to £3.4B, below the anticipated £4.4B.
Looking ahead, the Final Services PMI (forecasted at 51.4) on Monday will be closely scrutinized to gauge the resilience of the UK’s services sector and its potential impact on the Pound.
GBP/USD Technical Outlook: Struggling Below Key Resistance Levels
GBP/USD is currently trading at 1.2445, up 0.07% on the day, but facing resistance near the 38.2% Fibonacci retracement level at 1.2449. The pair remains under pressure, trading below both the 50-day EMA at 1.2509 and the 200-day EMA at 1.2641, reinforcing the prevailing bearish sentiment.
Immediate support for GBP/USD is located at 1.2406, with further downside protection at 1.2325. A break above the 1.2509 resistance is critical for any bullish reversal, with potential targets at 1.2553 and 1.2607. The descending trendline continues to cap any gains, signaling a cautious outlook for the pair.
The Relative Strength Index (RSI) is hovering near 43, indicating weak momentum. Bears remain in control unless a clear breakout above 1.2509 occurs. The near-term outlook will likely be dictated by movements around the key resistance and support levels.
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