The DXY broke out last week, but how will that affect your favorite currency pairs next week?
I’ll have all the details in today’s video, including key levels and potential targets for the DXY, EURUSD, GBPUSD, NZDUSD, and EURCAD.
US Dollar Index (DXY) Forecast
The DXY broke above 105.60 last week, something that I’ve mentioned as a strong possibility in recent videos.
The June 7th reclaim of channel support signaled a higher US dollar, which we’ve seen following the FOMC volatility on the 12th.
If the DXY can hold above 105.60 going into next week, traders should have a new range to trade toward 106.50 resistance.
Alternatively, a failure to hold above 105.60 would suggest a pullback next week.
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EURUSD Forecast
EURUSD has been mostly sideways this week, but a key development that could be significant going forward is what’s occurring on the weekly time frame.
Last week we saw EURUSD close below the 1.0725 handle.
That’s been a critical pivot for the euro since last November.
The EURUSD managed to climb above 1.0725 this week between Monday and Wednesday, but the pair looks set to close this week well below that mark.
That means the pair is holding below 1.0725 on a weekly closing basis, which keeps my focus on the November 22nd trend line near 1.0650.
GBPUSD Forecast
GBPUSD is breaking down this week after retesting its 2021 descending trend line that we’ve discussed for weeks.
The pound held above 1.2685 support on the 14th, so the bounce between Monday and Wednesday was expected.
However, I’ve maintained my short position that I mentioned to VIP members in real-time, which is now in profit by over 150 pips.
This week’s close below 1.2685 flips that area to resistance next week and exposes 1.2560.
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NZDUSD Forecast
We discussed NZDUSD on Thursday as one to watch for next week.
Despite the choppy price action since mid-May, the New Zealand dollar has formed what could be a topping pattern.
However, a sustained break below the 0.6105 area is required to open up downside targets like 0.6050.
Until then, NZDUSD is range-bound and relatively unfavorable.
EURCAD Forecast
EURCAD turned bearish on June 13th following the close below 1.4765.
That confirmed the fakeout above that mark, and fakeouts like this tend to trigger extended moves in the opposite direction.
Unfortunately, we didn’t get the sweep of 1.4765 I was looking for to enter short.
But this week’s move below the October trend line could present a second-chance opportunity next week.
Today’s close below the trend line flips the 1.4730 region to resistance, with key support coming in at 1.4490.
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