Weekly Forex Forecast (February 27-March 3, 2023)

Today’s weekly Forex forecast covers the DXY, SPX500, EURUSD, GBPUSD, and AUDUSD.

Markets are at a pivotal point, with the US dollar testing a key breakout level and the S&P 500 testing its all-time high trend line on Friday.

Both markets offer surprising clues about forex this week.

Watch the video and scroll down to view the charts to prepare for next week.

US Dollar Index (DXY)

The DXY is testing a must-hold support area today at 105.00.

We saw the market close last week above it. However, as mentioned in Discord, the USD was still below the 105.60 daily pivot.

So, for now, the 105.00 to 105.60 region remains key resistance for the US dollar.

You can also see from the chart below that we could have a confirmed fakeout on our hands.

Because Friday closed above 105.00, a daily close back below that, and especially below 104.60, would confirm the fakeout and open up downside targets.

But as always, we won’t have confirmation until today’s close, and a lot can happen in the next few hours.

S&P 500 (SPX500)

The S&P 500 tested massive support on Friday at 3,940. It’s a level I’ve discussed at length with members as it’s a trend line from the all-time high.

So it’s no surprise to see the S&P bounce today, given the significance of 3,940.

That said, bulls have work to do, including securing a daily close above 4,020.

The area between 4,000 and 4,020 has been a key area for the S&P 500 since mid-December, and Friday’s close means it’s still serving as resistance.

However, a daily close above 4,020 would serve as a bullish reclaim for a potential push higher into 4,085.

But I have to stress that the 4,020 region is resistance for now, with key support coming in at 3,930.

EURUSD Forecast

Last week, I wrote about a potential falling wedge on the EURUSD 4-hour time frame.

We saw the euro drop below the apex of that wedge on Friday and close the week there.

However, EURUSD bulls are fighting back this week, and the euro has reclaimed the lower level on a 4-hour closing basis.

This is why I always say that Friday moves aren’t to be trusted.

A daily close above 1.0580 would confirm the reclaim and expose higher levels, including the 1.0780 region.

Alternatively, a daily close below 1.0580 would keep last week’s breakdown intact and leave 1.0480 support exposed.

GBPUSD Forecast

GBPUSD is bouncing from the 1.1915 range support I’ve discussed several times recently.

In many ways, that’s a must-hold support for bulls, as a daily close below it would break the multi-month range and expose 1.1635.

But, for now, 1.1915 support is holding, which leaves GBPUSD range-bound, with 1.2130 coming in as key resistance.

A daily close above that 1.2130 region would be bullish toward 1.2300, while a daily close below 1.1915 range support opens up 1.1635.

AUDUSD Forecast

AUDUSD played out perfectly for us following the break below 0.6870.

But the better risk-to-reward trade came on the retest of former channel support at 0.6920, as mentioned in last week’s forecast video.

That level is the main reason I wasn’t bullish on AUDUSD after the bullish-looking candle on February 17th.

That and it formed on a Friday within sideways consolidation.

It’s important to note that AUDUSD has entered a bit of support today at 0.6700.

Because of the weeks of congestion in late 2022, this support area for the Australian dollar starts at 0.6700 and ends at 0.6600.

So anyone trying to short AUDUSD here could be in for some trouble.

It’s probably best to wait for a retracement before entertaining fresh shorts, or even bullish price action from this support area for a bounce.