The US dollar is back in a familiar range, but how might that affect your favorite currency pairs next week?
Get the details in today’s analysis, including key levels and targets for the DXY, EURUSD, GBPUSD, USDCAD, and XAUUSD.
US Dollar Index (DXY) Forecast
The DXY continues to churn higher following the 105.50 reclaim.
Despite a relatively choppy rally, things continue to look mostly bullish for the US dollar following the early June fakeout below channel support.
Given where the DXY is trading, a retest of 106.50 resistance looks to be in the cards, but maybe not before a slight pullback early next week.
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EURUSD Forecast
EURUSD appears to be closing a third week below 1.0725, which is keeping the pair limited to the upside.
However, shorts are tricky here, given the proximity of the November 2022 trend line near 1.0650.
For now, I think this is a good time to stay patient and wait for EURUSD to make its next move, namely whether bears can clear the late 2022 trend line in the coming weeks.
GBPUSD Forecast
GBPUSD offered shorts a nice entry this week following the 1.2685 retest.
However, the downside has been limited thanks to some choppy summer price action.
That said, I still favor downside targets like 1.2560 and potentially the 1.2400 region in the coming weeks.
Alternatively, a sustained break above 1.2685 on the daily time frame would be short-term bullish.
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USDCAD Forecast
USDCAD has been one of the choppier currency pairs this year.
We had a nice long opportunity in January following the 2021 trend line fakeout, but since then opportunities have been limited.
Despite that, the pair is holding above a previous descending channel with support coming in at 1.3640.
There’s a decent chance we see the June 25th lower wick fill, potentially sometime next week.
I continue to like USDCAD higher toward 1.3830 and possibly 1.3870, but acknowledging the range-bound choppy conditions so far this year is a necessity.
Gold (XAUUSD) Forecast
Gold is another market that has been incredibly sideways for the last few months.
But the upcoming price action could get interesting, given that XAUUSD will be forced to choose a direction in the coming days.
On the one hand, the price action since April could be a topping pattern with a $2,150 target.
And on the other, the consolidation could be a wedge pattern following the rally since February.
As always, patience is imperative to wait for the market to make the first move.
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