The forex market has a big decision to make in June. The US dollar has been in a stalemate for weeks, but recent price action suggests a significant move is imminent.
Watch today’s video below to see how I’m trading the DXY, EURUSD, GBPUSD, USDCHF, and XAUUSD next week! Remember to scroll down for more details and annotated charts.
US Dollar Index (DXY) Forecast
The DXY remains weak as we head into June. The index failed to break the 100.20 resistance level last week, following Thursday’s gap up.
As long as the US dollar remains below 100.20, there is no reason to be bullish on the USD. There is every reason to suspect a return to 97.70 while remaining below 100.20.
The April low came close to 97.70 but didn’t thoroughly retest the level. It’s also a very precise level from early 2022, so the lack of an April retest could prompt further downside.
For now, the DXY is range-bound between 98.90 support and 100.20. But as mentioned above, the potential for a 97.70 test exists while the downtrend is intact.
EURUSD Forecast
EURUSD has been incredibly choppy since mid-April. Last week’s price action was not an exception, with the euro ending the week where it began.
However, the pair respected the bull flag breakout I discussed recently. The 1.1275 level marked a bullish breakout on May 23rd. The EURUSD tested the area last Thursday and held it as new support on the daily time frame.
That could propel the euro higher in June. As mentioned in recent videos, the measured objective of the bull flag is near 1.1900. That’s also a key level from 2021.
Of course, the EURUSD must also contend with key resistances such as 1.1425 and 1.1530. Key support next week remains 1.1275.
GBPUSD Forecast
GBPUSD tested a significant level last week at 1.3430. It’s the September 2024 high and the April high from this year.
The pound managed a breakout on May 23rd, closing the day and week above it. As long as GBPUSD trades above it on a daily closing basis, I’ll remain bullish toward 1.3630.
Key resistance for GBPUSD next week includes 1.3630, 1.3750, and 1.3870. Of course, key support remains the 1.3430 handle.
If GBPUSD loses 1.3430 support on the daily chart, it will confirm a buy-side fakeout. That would be bearish for the pound and re-expose 1.3200.
For now, there is no indication that the breakout is likely to fail. But as always, it’s imperative to stay flexible and entertain all possible outcomes.
USDCHF Forecast
The USDCHF remains locked in a 130-pip range following the breakdown on May 20th. We saw the 0.8330 resistance level tested last week as the US dollar gapped up in after-hours trade.
Keeping things simple, USDCHF is range-bound until proven otherwise. Key support is 0.8200 as we enter June, with resistance at 0.8330.
A DXY retest of 97.70 would likely spark the next leg lower for USDCHF. However, it’s essential to respect the chart, and currently, the pair is locked in a tight range.
Despite the lack of momentum, I’ve kept USDCHF on my radar for next week simply because the levels have been immaculate since April.
XAUUSD (Gold) Forecast
XAUUSD has been a challenging market to interpret recently. We saw gold break out from a descending channel on May 23rd, only to drop back inside the channel two days later.
That failure confirmed a buy-side fakeout. However, trading fakeouts like this from a diagonal is more difficult than from horizontal levels. That’s certainly been the case with the recent XAUUSD price action.
For now, gold’s next move seems uncertain. I’m staying in my short position, which is slightly in profit, and I’ll manage it on a day-by-day basis next week.
Key support for XAUUSD is $3,230, with resistance at $3,320.
