The US dollar is finishing its second week above 97.70. What does that mean for the forex market, and will we see 97.70 revisited next week?
Watch today’s Weekly Forex Forecast to see how I’m trading the DXY, EURUSD, GBPUSD, EURAUD, and XAUUSD next week.
US Dollar Index (DXY) Forecast
The DXY is pulling back on Friday after testing its mid-range near 98.55. That was a key resistance for the dollar that I mentioned several times last week.
However, despite the pullback, the DXY remains above its multi-year support at 97.70. We even saw the US dollar test 97.70 as key support during Wednesday’s volatility.
As long as the DXY remains above 97.70 on a weekly closing basis, the dollar looks constructive. A sustained break below that mark on the high time frames would suggest a continuation of this year’s downtrend.
Key resistance for the DXY remains at 98.55, with an extension toward 98.80. Above that are the June range highs at 99.35.
EURUSD Forecast
EURUSD has played out nicely for us so far in July. I managed to get short at 1.1773, which I announced in real time in the VIP Discord group. My targets were 1.1690 and 1.1638.
The euro broke its May channel support last Tuesday, retesting the level as new resistance during Wednesday’s volatility.
One thing I noted in last week’s Mid-Week Outlook is the idea that EURUSD could spend a few days between 1.1565 and 1.1720. That’s the range from Wednesday’s volatility that remains a factor heading into next week.
The price action could remain relatively tight until the EURUSD resolves the range from Wednesday. Key resistance levels are 1.1685 and 1.1750, with support coming in at 1.1580.
GBPUSD Forecast
GBPUSD broke its 2025 trend line last Monday, which the pair retested as resistance on Tuesday and Wednesday.
However, sellers have been unable to retake control since Monday’s break. GBPUSD consolidated at the June low near 1.3380, and is rallying on Friday as the dollar retreats.
There’s a buy-side imbalance for GBPUSD at 1.3525 that could become a factor next week. This could align with the DXY possibly testing 97.50 to “clean up” the single prints in the region.
In other words, 1.3525 is a key resistance level for the GBPUSD that I’ll monitor closely next week. Key support remains at 1.3380.
EURAUD Forecast
I don’t usually trade crosses, given the sometimes unfavorable spreads and slippage that often occur around news events. They also don’t behave as well as some of the major currency pairs.
However, I made an exception last week for EURAUD. As shared with VIP members in real time, the 1.7935 level was key resistance for several reasons.
First, EURAUD broke its 2025 trend line two weeks ago. That level intersected last week’s prices in the 1.7935 region.
Second, and more importantly, 1.7935 is the two-month composite point of control. That’s a fancy way of saying it’s the highest volume level between June and July.
Lastly, EURAUD began July with a bearish engulfing week, wiping out three weeks of gains. That alone was reason to be relatively bearish last week following the relief rally into 1.7935.
There are also several poor lows, or unfinished auctions, below current levels. Those include 1.7769, 1.7720, and a single print at 1.7709.
Time will tell if we get follow-through next week. I remain short EURAUD from 1.7922, an entry I shared with Discord members minutes after taking the trade.
XAUUSD (Gold) Forecast
Gold has been a stubborn market in July. The tight trading conditions make this a wait-and-see market, especially after considering the inflection point gold faces this month.
On one hand, XAUUSD is once again catching a bid from its May trend line. Gold tested the $3,310 level on Thursday. On the other hand, the market has carved lower highs and lows since June.
XAUUSD is testing the top of its June channel on Friday at $3,360. That level, combined with $3,370, offers a resistance area to watch next week. Support remains in the $3,322 to $3,310 region.
As mentioned in Thursday’s video, XAUUSD will remain range-bound between these areas. If you’re more of a breakout trader, waiting for a resolution from this consolidation is the way to go.
