During the European session on Friday (May 10), the US dollar index maintained a narrow fluctuation trend. Intraday trading was at 105.274, hitting a low of 105.18. The following is an analysis of several groups of currency pairs in the EUR/USD, GBP/USD, and US dollar indices.
In the US, the number of people applying for unemployment benefits unexpectedly rose to 211,000, exceeding the previous forecast of 212,000 and 209,000, respectively. This data indicates a possible slowdown in the US labor market.
For the pound, the recent economic report showed mixed feelings. Compared with expectations of 0.1%, monthly GDP growth of 0.4% was better than expected. The initial value of quarterly GDP also exceeded expectations, growing by 0.6%, higher than the forecast of 0.4%.
However, construction production fell 0.4% month-on-month, contrary to the previous 0.8% increase. The merchandise trade deficit widened slightly from £14.5 billion to £14 billion.
Furthermore, the service sector index rose to 0.7% over the past three months, indicating moderate growth in the service sector. Industrial and manufacturing production improved slightly, 0.2% and 0.3%, respectively, indicating some elasticity in these sectors.
FOMC members Bowman and Barr will speak on the US economic calendar, which may provide insight into future monetary policy. The University of Michigan's initial consumer confidence index for May is expected to be 76.3, slightly lower than the previous 77.2, indicating a possible decline in consumer confidence. Furthermore, the initial inflation forecast was set at 3.2%.
In Europe, the ECB will publish the minutes of its monetary policy meeting, which may reveal the future direction of monetary policy in the Eurozone. Regarding the pound, Monetary Policy Committee members Pierre and Dingela are planning to speak, which may affect market expectations about the Bank of England's monetary policy. In addition, NIESR will also publish the UK's GDP forecast, which is expected to be 0.4%, further clarifying the economic outlook.
US dollar index
(US dollar index daily chart source: eHuitong)
The US dollar index rose slightly by 0.04% and is currently trading at 105.2644. It is located above its pivot point of $105.490. The resistance levels are at $105.747, $105.914, and $106.146, and close to these levels could curb further gains. The support level is currently at $105.195, and the more important levels are after $104.938 and $104.640, which is critical to preventing a deeper decline.
Technical indicators, including the 50-day EMA (105.396) and 200-day EMA (105.485), hover around the current price, indicating a narrow trading range. The trend of the US dollar index will depend on whether it can break through the key $105.490; a rise above 105.490 may indicate a bullish trend, and failure to exceed it may trigger a bearish trend.
EUR/USD technical forecast
(EUR/USD daily chart source: eHuitong)
EUR/USD traded at 1.0779, a slight decrease of 0.02%. The pair found a pivot point at 1.07511, which is a key hurdle in determining the future trend. The resistance levels are approaching 1.08115, 1.08464, and 1.08816, challenging any northward price movement.
Instead, support levels are established at 1.07018, 1.06512, and 1.06119, which are likely to stabilize the decline. The 50-day and 200-day exponential moving averages are around 1.07440 and 1.07477, respectively, which suggests that the market is at a crossroads.
GBP/USD technical forecast
(GBP/USD daily chart source: eHuitong)
GBP/USD rose slightly by 0.05% and traded around 1.2529. The pair's pivot point is at 1.25046, indicating cautious market sentiment. The recent resistance levels are found at 1.25676, 1.26328, and 1.26965, which may challenge the bullish movement.
Instead, support levels are at 1.24459, 1.24032, and 1.23475, providing a potential bottom to offset bearish pressure. The 50-day and 200-day exponential moving averages are at 1.25148 and 1.25406, respectively, hovering near the current price, indicating a balanced but delicate market situation.