This week was relatively quiet in the forex market, but conditions suggest some significant turning points could be on the horizon later this month.
In today’s Weekly Forex Forecast, I’ll share how I’m approaching the DXY, EURUSD, GBPUSD, USDCAD, and AUDUSD in the week ahead.
Let’s dive in!
US Dollar Index (DXY) Forecast
The DXY continues to rally today, bouncing perfectly from the September trend line at 108.60 that I highlighted earlier this week.
This level has been a key focus in the VIP Discord group, where we’ve seen some solid trade opportunities emerge, especially with USDCAD, which I’ll cover below.
This week’s close near 109.50 could provide valuable clues for next week’s price action.
A weekly close above 109.50 would reinforce last week’s breakout and shift the focus to the 110.50 channel resistance heading into the end of January.
On the other hand, a weekly close below 109.50 could indicate early struggles for the DXY next week.
I remain bullish on the US dollar as long as the uptrend stays intact, particularly while the DXY trades above its September trend line.
EURUSD Forecast
EURUSD traded sideways this week, remaining stuck between the 1.0200 support and 1.0350 resistance levels I’ve mentioned recently.
Wednesday’s retest of 1.0350 offered a solid short opportunity for intraday traders, but there hasn’t been much else to work with.
As I noted earlier this week, the “easy” EURUSD trades from October are likely behind us, especially with where the DXY is trading this month.
While the 2022 imbalance at 1.0090 remains a potential target for the euro, it’s not actionable right now.
For the moment, EURUSD is stuck in a range, and that’s unlikely to change until we see a clear breakout.
GBPUSD Forecast
Like EURUSD, GBPUSD has had a quiet week.
One level I highlighted for VIP members earlier this week was the 1.2300 resistance.
As expected, the pair rejected this level with a 130-pip drop into Thursday’s session.
Today’s close around 1.2200 could offer insight into next week’s price action, though it’s not actionable for me at this point.
A convincing weekly close below 1.2200 would open the door to the 1.2070 region next week, while a close above 1.2200 would keep GBPUSD range-bound.
USDCAD Forecast
USDCAD has been range-bound since December, largely due to rising oil prices supporting the Canadian dollar.
This dynamic has kept the pair confined to its current range.
This week, USDCAD provided another buying opportunity from support, as highlighted in Tuesday’s video.
What made this retest stand out was the confluence of the September trend line support near 1.4335.
Wednesday’s dip allowed me to buy at 1.4311, adding to my long position from last week.
I’ve already taken partial profits near 1.4450 twice, as shared with VIP members in real time.
Today, USDCAD is encountering resistance at those 1.4450 range highs, as expected.
A sustained break above 1.4450 would expose my final target at 1.4670.
I remain bullish while USDCAD holds above its September trend line at 1.4340.
AUDUSD Forecast
AUDUSD has been trending lower since late September, losing more ground than many of its counterparts.
This downtrend has formed a well-defined descending channel, which could present opportunities in the days ahead.
If the DXY climbs to test 110.50 later this month, it might push the Australian dollar toward its 2008 financial crisis low of 0.6000.
That said, AUDUSD bulls reclaimed the 0.6170 level this week, though the rally has stalled at the September channel resistance.
While AUDUSD remains indecisive for now, this descending channel could offer a setup later this month, particularly if the DXY retests 110.50.