Will the US dollar retreat next week or push closer to 109.00–110.00?
Find out how this could impact the forex market in today’s Weekly Forex Forecast, including my plans for the DXY, EURUSD, GBPUSD, and USDCAD.
US Dollar Index (DXY) Forecast
The DXY is holding firm today after breaking above the 108.00 highs that held since November 2022.
While last Wednesday’s FOMC sparked a sharp US dollar rally, Friday’s bearish engulfing candle raises questions about the sustainability of the move.
However, I continue to like the DXY toward my final target in the 110.00 region, something I’ve discussed since the 102.60 reclaim.
A pullback this week could target 107.10 to 107.50, a key support area.
What happens at 107.10 will decide whether the DXY resumes its rally toward 109.00–110.00 or reverses back to the December low near 105.40.
EURUSD Forecast
EURUSD rebounded sharply on Friday after testing the 1.0350 support level following Wednesday’s FOMC.
The possibility of a double bottom is on the table, but it hinges on the 1.0450 resistance next week.
A sustained daily close above 1.0450 would open the door to 1.0615.
On the other hand, a rejection from 1.0450 and a break below 1.0350 could set the stage for a move toward parity.
Don’t expect a lot of movement this week with Christmas just days away, but the EURUSD is one to watch in early 2025.
GBPUSD Forecast
GBPUSD is holding below its multi-year trend line today near 1.2570.
Last week appears to have held below the level, albeit by a few pips.
I want to see how GBPUSD trades for a few days before making a definitive call, but a failure to reclaim 1.2570 opens up sell-side levels such as 1.2380.
USDCAD Forecast
USDCAD pulled back late last week after breaking above the 1.4265 key level.
For those who’ve watched my videos since November, you know that I was calling for an aggressive bullish breakout from USDCAD following the weekly close above 1.3870.
That confirmed the breakout of a two-year range and opened the door to 1.4265.
If USDCAD can find support there, we could get the final push into the multi-year channel resistance at 1.4670.
