Is the US dollar poised to break out of its current range, or will we see more fluctuations next week?
Last week, there were updates like a rate decision from the ECB, a softer CPI, and a hotter PPI. Yet, the charts suggest a clear conclusion.
The weekly Forex forecast today discusses trade plans for DXY, EURUSD, GBPUSD, and XaUUSD. We’ll highlight key levels, bullish and bearish scenarios, and possible targets for the upcoming week.
US Dollar Index (DXY) Forecast
Over the past week, the US Dollar Index remained stuck within a specific range.
The hotter PPI report on Wednesday and the softer CPI on Thursday didn’t push DXY beyond its current comfort zone. Even with the ECB’s decision to hold rates steady and postpone any cuts, there was no breakout.
This indicates that DXY is honoring the technical levels in play, along with a notable lack of confidence, a recurring theme since early August.
The support for the US Dollar Index stands at 97.70, while resistance is observed at 98.60.
Keep an eye on this week’s close, particularly in relation to 97.70. If the following weekly closures drop to a poor low of 96.70 (indicating unfinished transactions), we could be in for some turbulence. The range between 97.70 and 98.60 seems to be holding firm for now.
A consistent break below 97.70 on the daily chart could reveal areas around 96.70 to 96.60, which align with 2011 channel support and some unfinished auctions.
Such inefficiencies at 96.70 often act like a magnet in the market.
On the flip side, a sustained close above 98.60 puts 99.35 on the radar, with the 99.88 imbalance from August also in play.
This particular print acts as an upward target, though the downward trend near 100.00 poses a larger hurdle for the US dollar index.
Structurally, the DXY still leans bearish. Sellers have been active since August, especially at resistance points. However, buyers continue to defend the 97.70 mark, keeping that floor steady for now.
This situation traps the US dollar index within a sideways range.
Key takeaways:
- Repeated weekly breaks below 97.70 suggest a drop to 96.70
- Holding above 97.70 indicates potential for 98.60
Eurusd Prediction
EURUSD held steady above Trendline Support last week.
The pair remained stable following the ECB’s decision to hold rates constant. Lagarde emphasized a restrictive policy, indicating that cuts aren’t in the cards yet.
This action provided short-term support for the euro and helped keep EURUSD near recent highs.
The primary support level remains around 1.1715, a line we’ve focused on before. This critical level on the weekly chart is much more significant than in daily contexts.
This level aligns closely with February’s trendline support currently placed at 1.1690. If the Euro stays above that level, the bullish outlook remains intact.
Immediate resistance is located at 1.1780, with further levels around 1.1810–1.1817. Should EURUSD break and hold above this zone, the 1.1908 high could be within reach.
That said, if this occurs, one must tread carefully with respect to DXY and the 96.60 support.
If the pair dips below 1.1690, it risks exposing areas around 1.1587–1.1564. This zone encompasses August lows, which remain untested.
Further declines could target 1.1453, where a single print from May is still left open.
For now, EURUSD lacks strong conviction. If you haven’t entered these markets yet, it might be wise to hold off for a moment.
Important takeaways:
- Above 1.1690 = bullish trend stays intact, watch for 1.1800 resistance
- Below 1.1690 = risk of drop to 1.1560-1.1580
GBPUSD Prediction
GBPUSD tested the resistance level at 1.3579 last week but couldn’t quite surpass it.
Given the significance of the July levels and beyond, it’s clear that a sustained break above 1.3580 is crucial for the Bulls. However, as it stands right now, that level remains a challenge.
A consistent break over 1.3580 would allow GBPUSD to possibly rally to 1.3618, a poor high from August that still remains in play.
Beyond that, key targets exist at 1.3686, 1.3714, and 1.3730, but these are only reachable after breaking above the 1.3580 mark.
On the downside, if GBPUSD falls below 1.3540 daily, I see it heading to 1.3484, a low that has yet to be cleared.
Should that occur, a move to 1.3418 is possible.
Similar to EURUSD, the pound is displaying a notable lack of decisive action. It seems like one of those market moments where trading doesn’t quite feel right.
Important takeaways:
- Above 1.3580 = targets at 1.3618 and 1.3700
- Below 1.3540 = potential shift back towards 1.3484
Xauusd (Gold) Prediction
Gold experienced a robust week, managing to close above 3,500 for the second time, climbing on the 2024 upward channel.
As XaUUSD trades at a peak, it’s tough to pinpoint solid resistance levels. Besides the 2024 channel resistance, larger figures like $3,700, $3,800, $3,900, and notably, $4,000 loom ahead.
The most immediate target looks like 3,700. If buyers keep pushing, the next psychological benchmark to watch is 3,800. Beyond that, channel resistance can indeed weigh heavily.
As for support, 3,500 is clear. However, I would be surprised to see a deep pullback here, especially if bulls intend to maintain control.
Gold currently presents itself as a prime candidate for dip buying. Still, there may be two sell-side single prints next week at $3,601 and $3,563.
Re-testing any of these levels could offer a chance to buy the dip before the next upward movement.
Important takeaways:
- Single prints at $3,601 and $3,563 could present buying opportunities
- Key resistance levels are the big round numbers ($3,700, $3,800, etc.)
