The US dollar (DXY) is pulling back today, but what does that mean for pairs like EURUSD, GBPUSD, and USDJPY next week?
Find out in today’s weekly forex forecast for the week ending October 25, 2024.
US Dollar Index (DXY) Forecast
The DXY is pulling back slightly today, but US dollar bulls remain in control following the 102.60 reclaim this month.
The October 9th close above 102.60 signaled a significant turning point for the USD.
It put the dollar index back inside of its 2023 ascending channel, and a well-established horizontal area from August of last year.
The DXY also reclaimed the 103.00 to 103.30 area this week, flipping it back to key support.
However, dollar bulls face a monumental challenge next week in the 104.00 to 104.50 region.
Although we’ll likely get a pullback from there, I’d be careful to expect much dollar weakness this year while areas like 103.00 and 102.60 are holding as support.
EURUSD Forecast
The EURUSD has played out nicely for us this month following the close below 1.1110 and the 1.1000 breakdown
Turning bearish on the euro was straightforward after the DXY’s break above levels like 102.00 and especially 102.60
However, Friday’s session is threatening to close back above the 1.0840 pivot, which could offer some relief next week
That said, the EURUSD would need to secure a daily close above that level to expose 1.0900
As long as the DXY is above 103.00 and 102.60, I favor looking for EURUSD shorts at resistance with a target in the 1.0800 range
GBPUSD Forecast
GBPUSD has been more challenging to trade than its euro counterpart due to the choppy price action this month
However, the failure to hold above 1.3200-1.3250 at the beginning of the month signals a potentially significant turning point for the pound
That was the first weekly break of structure since the rally began in April
As mentioned earlier in the week, 1.3050 has flipped to resistance for GBPUSD, with support coming in at 1.2900
There’s also a daily imbalance in the 1.2900 region based on the August 16th candle
USDJPY Forecast
USDJPY has been relatively choppy this week despite continuing the rally that began in September
However, the recent break above levels like 146.50 has opened up resistance levels like 151.00 to 152.00
Given today’s price action from USDJPY and even the DXY, I would expect a pullback early next week
One area to watch is 148.50, with a failure there opening up 146.50
Remember that the 151.00 to 152.00 area will attract significant selling pressure if tested