Today’s weekly forex forecast covers the DXY, EURUSD, GBPUSD, USDJPY, and AUDUSD.
The dollar index secured a potentially significant reclaim on Friday, while pairs like EURUSD and GBPUSD faltered.
I discuss that and more in today’s forex forecast.
Watch the video and scroll down to view the charts to prepare for the week ahead.
US Dollar Index (DXY) Forecast
The DXY finished the week lower but ended Friday with a potential bullish reclaim of 102.50.
It’s a potential reclaim for now, as the first 24 hours of the new week will either confirm or negate Friday’s rally.
If the dollar index follows through to the upside early this week, the 103.50 yearly open is next.
On the other hand, a daily close below 102.35 and especially 101.90 would be bearish toward the 101.30 area.
EURUSD Forecast
EURUSD had an eventful week, first pushing up to retest the 1.0930 resistance level, and then losing significant ground on Friday.
Friday’s session closed below the 1.0850 key level, and Thursday’s open.
So if Monday closes below Friday’s 1.0837 low, it confirms the bearish engulfing pattern and opens up key support at 1.0750.
That’s also close to the October ascending channel support I’ve discussed.
For now, last week’s EURUSD close looks relatively bearish, but the first 24 hours of the new week will be crucial to confirm or negate Friday’s candle.
GBPUSD Forecast
GBPUSD came close to the 1.2445 range highs last week, but not quite.
Like EURUSD, the pound closed Friday with a relatively bearish-looking candle.
It broke the minor pivot at 1.2345 and closed below the 4-hour trend line from the 16th.
But also similar to the DXY and EURUSD above, I want to see how GBPUSD responds in the first 24 hours of the new week.
If the 1.2345 area holds as new resistance, a move to 1.2288 and possibly the 1.2200 mid-range could be next.
Alternatively, a daily close back above 1.2345 would target the 1.2450 range highs.
USDJPY Forecast
I wrote about USDJPY on Friday, noting that bulls must secure a daily close above 132.90 to extend the rally to 134.40.
They came close on Friday, but not quite.
So, for now, USDJPY remains locked between 132.65 and 132.90.
There isn’t much to do here until we get a daily close above 132.90 or a sustained break below the 130.70 confluence of support.
But given the ascending channel below, I’m more interested in the bullish scenario if it confirms.
AUDUSD Forecast
I wrote about AUDUSD last week, noting that 0.6720 was resistance.
Sure enough, Friday retested the level and sold off into the close.
However, the more appealing AUDUSD trade will materialize with a higher time frame close below channel support near 0.6670.
That would open up levels like 0.6580 and 0.6525.
Alternatively, a daily close above 0.6720 would expose 0.6780.
