Last week’s US dollar rally created several attractive setups in the forex market.
Watch today’s video to see exactly how I’m trading the DXY, EURUSD, GBPUSD, USDCAD, and XAUUSD next week.
US Dollar Index (DXY) Forecast
The DXY played out according to plan last week, breaking above 99.40 on Monday and respecting the level as new support on Tuesday.
That was my base case for the push back into the 100.25 resistance area.
For now, dollar bulls are still dealing with that area as of Friday’s session. As such, a pullback early next week could be in the cards.
However, while I would like to see a retest of the 99.70 region, I’m not confident we’ll get the DXY that low. That’s especially true when analyzing charts like EURUSD and GBPUSD.
Any pullback into the 99.90 region, and I’ll watch for a lower time frame Change of Character (CHoCH) to confirm a bullish trend continuation.
Alternatively, I’ll be eyeing the 99.70 region for a bounce from the DXY.
EURUSD Forecast
EURUSD trended lower last week, starting with Monday’s bearish CHoCH near 1.1600. That put sellers in control and suggested that shorting strength was preferred.
Although EURUSD ended last week in sideways consolidation, the market structure remains favoring sellers.
The pair closed below its November open, and faces selling pressure in the 1.1530/40 region early next week.
If EURUSD tests that area, a low-time-frame shift from bullish to bearish could be appealing for a short. Key support is the daily Fair Value Gap (FVG) from August at 1.1460.
However, Wednesday’s aggressive selloff left a buy-side imbalance at 1.1560/70. Markets tend to revisit thinly traded areas like this, but whether the euro targets it first depends on the price action at 1.1540 resistance.
As long as EURUSD trades below 1.1522, I’m only interested in shorting pullbacks into premium.
GBPUSD Forecast
GBPUSD has been incredibly choppy in November. However, like EURUSD, the pair remains bearish on the 4-hour time frame.
The pound closed last week below 1.3140, which means buyers lost the battle at the previous weekly range lows.
Note how GBPUSD closed two previous weeks above 1.3140, suggesting that bulls were holding the line. Last week’s bearish close changed that.
Combine the 1.3140 weekly resistance with a 1.3134 daily FVG, and sellers are likely to defend this area if tested next week.
That region also aligns with a 4-hour descending trend line from the September high, making it a confluence of resistance.
A rejection from the 1.3130/40 area could target recent lows near 1.3020. However, 1.2945 is a composite Point of Control (PoC) from the March consolidation, making it worth watching.
As long as GBPUSD remains below 1.3156, I’ll remain bearish, meaning I’m only interested in shorts. A sustained break above that could flip the pair from bearish to bullish.
USDCAD Forecast
USDCAD has trended higher since June, so watching for buying opportunities into discount windows is ideal, in my opinion.
So far in November, we’ve seen USDCAD mostly range-bound between 1.3970 and 1.4130. However, the multi-month uptrend remains.
With that in mind, a USDCAD pullback into the 1.4060 region could be interesting for a long setup, but only with the right low-time-frame bullish CHoCH.
If we get it, that could send USDCAD back to its 1.4130 range highs. There’s also a daily order block near 1.4250 that would make for an interesting target in the coming weeks.
Alternatively, a sustained break below 1.4040 would flip the lower time frames from bullish to bearish in the near term.
Gold (XAUUSD) Forecast
We caught a nice XAUUSD long setup in the VIP group last week based on a 15-minute bullish CHoCH on Tuesday. The target was $4,120/30 based on the resting buy-side liquidity in the area.
That trade played out nicely, and some VIP members even got short gold from that $4,127 retest.
For now, XAUUSD remains mostly range-bound. However, Friday’s failure to hold above a key trend line near $4,072 could be problematic for gold bulls early next week.
That said, Friday price action should be taken with a grain of salt, given the lower volume before the weekend.
The 4-hour time frame is bearish following the break below $3,950 in late October. So, although the daily and weekly charts remain bullish, the intraday charts continue to suggest lower prices ahead.
I’ll be watching how gold trades near $4,070/80 early next week. A rejection between the 1-hour inversion FVG (iFVG) at $4,078 and the hourly FVG at $4,082 could present a short opportunity.
Alternatively, I’ll be watching the trend line support near $4,030.
