The US dollar reclaimed a significant level late last week, so how might that affect your favorite currency pairs this week?
Check out the video below for the latest on the US Dollar Index (DXY), EURUSD, GBPUSD, AUDUSD, and XAUUSD.
US Dollar Index (DXY) Forecast
If you saw last weekend’s forecast video, you know I was watching for a DXY sweep of 104.00 support, followed by a reclaim of the level.
The reason I was looking for a sweep down to 103.50 was the liquidity that had built up below 104.00, combined with the imbalance from March 21st.
We got exactly that from the DXY this week, with Wednesday closing below 104.00 and Thursday closing back above the level.
This fakeout suggests we’re likely to see a stronger US dollar next week, which could, of course, affect currency pairs like EURUSD and GBPUSD.
Key resistance comes in at 105.00, with support at 104.00.
EURUSD Forecast
EURUSD failed to hold above 1.0925 this week, along with a 4-hour channel.
That leaves the euro vulnerable next week with key resistance at 1.0925 and support near 1.0840.
I like the idea of looking for shorts against 1.0925, but timing to get the proper risk-to-reward ratio will be essential.
A retest of the 2021 trendline closer to 1.0800 seems likely, especially with the recent bullish reclaim from the DXY.
GBPUSD Forecast
GBPUSD is another currency pair that looks vulnerable after last week’s DXY reclaim.
We caught the short from 1.3050 this week, as mentioned in last week’s forecast.
However, bears need to be cautious here, given the 1.2900 support area.
That said, I’ll be watching for fresh shorts next week as long as GBPUSD remains below 1.3000 on a daily closing basis.
AUDUSD Forecast
AUDUSD also played out nicely last week with a confirmed fakeout above the January trendline.
I outlined this scenario in last weekend’s forecast video.
That fakeout led to an 80-pip selloff this week, which may be just the start of a larger correction, given where AUDUSD ended last week.
Notice how the Australian dollar appears to have closed below the April trendline.
If AUDUSD holds below this area near 0.6700 next week, we could see a move to recent lows near 0.6630 and potentially 0.6580.
XAUUSD Forecast
Gold is one I mentioned to members last week when the market was rejected from channel resistance at $2,465.
Thursday’s retest of this level as new resistance triggered an aggressive selloff of over 2%.
Buyers will most likely want to defend the $2,390 area next week, and traders should keep in mind the imbalances toward $2,450.
However, given the US dollar index’s performance last week, I remain relatively bearish on XAUUSD in the short term.
