Forex Market Update
The Forex market is preparing for more trade announcements, with today’s FOMC minutes adding to the anticipation. Overall, the outlook seems quite positive for the upcoming days.
If you’re interested in trading, check today’s Forex Reviews for insights on DXY, EurUSD, GBPUSD, and XAUUSD.
US Dollar Index (DXY) Forecast
This week, the US Dollar is challenging a significant resistance level around 97.70. This point marks the lower boundary of the 2011 channel that previously failed in June.
Although the dollar has gained strength in July, it will need to surpass that 97.70 level to maintain momentum. Watching for breaks on higher time frames, particularly on weekly charts, is crucial.
Should the bulls overcome 97.70, there will likely be a buy-side imbalance for DXY. There are several gaps expected above 100.00 and possibly even 105.00.
That said, it’s crucial to respect the current chart. While there may be an imbalance above the present price, aiming for it without strong technical signals, like a sustained break over 97.70, is rather ineffective.
The primary support levels for DXY sit at 97.40 and 97.10, while the resistance areas are at 97.70 and 98.40.
EurUSD Prediction
The EurUSD showed a strong bullish close in June but seems to be pulling back this July. I pointed out this retracement earlier in the month.
The euro recently tested the upper boundary of the May channel, hinting at potential weakness. Plus, there’s a sell-side imbalance that could further push down the euro.
An imbalance remains at 1.1638, yet the challenge for Euro bears is that DXY has to stay below 97.70, which complicates a retest of EurUSD at 1.1638.
At the moment, EURUSD appears to be channeling within a range. Key support levels stand at 1.1685 and 1.1630, while resistance levels sit at 1.1750 and 1.1788.
I took a short position on EurUSD last week and secured half the profit this week. It was a solid daytime swing trade, although I’m not particularly keen on trading pairs these days.
GBPUSD Prediction
GBPUSD has fallen below the 1.3630 level discussed recently. This point aligns with a trendline derived from the highs of 2023.
Interestingly, this trendline should connect to the highs of 2024. Furthermore, there have been a few highs in GBPUSD since late May and June when that trendline acted as resistance.
The recent failure to break above this level might suggest a downward trend. But, DXY’s upcoming test at 97.70 could also impact this.
Current trading on pairs like EurUSD and GBPUSD remains tricky until there’s clarity with the DXY situation.
For GBPUSD, key resistance is at 1.3630, with major support falling at 1.3415. A couple of sell-side imbalances exist at 1.3509 and 1.3452.
XAUUSD (Gold) Prediction
Gold continues to trade below the trendline for 2025, a situation I predicted a few weeks ago could result in short-term weaknesses.
XAUUSD remains confined to a short-term descending channel. Metals found support on Tuesday, while a buy-side imbalance at $3,317 could be a target for buyers on Wednesday.
As I mentioned in Tuesday’s video, $3,322 represents a significant resistance point, and I’ll be watching how it reacts due to a compounded value area over the past six days.
Will XAUUSD test its June low near $3,250? The price action around $3,322, if it’s tested, alongside DXY’s behavior, will likely dictate the outcome.
