Weekly Forex Forecast (June 12-16, 2023)

Today I will show you exactly how I’m trading the DXY, EURUSD, GBPUSD, USDCAD, and NZDUSD next week.

We have some attractive setups forming ahead of next week’s US CPI and FOMC, which I’ll discuss in detail in today’s post.

Watch the video and scroll down for the annotated charts and analysis.

Let’s dive in!

US Dollar Index (DXY)

The DXY lost its 103.49 yearly open on Thursday, closing at 103.32.

However, dollar bulls fought back on Friday, closing the DXY marginally above the 103.49 yearly open.

We’ll see if Friday’s 103.55 close is enough to reclaim the yearly open and push the dollar higher next week.

Determining the dollar’s path will take the first 24 hours of the week.

A further pullback is likely to find support at 103.00, while a rally next week needs to break the 103.90 resistance and 104.30.

Remember that the event calendar is packed with market-moving events next week, including CPI on Tuesday and FOMC on Wednesday.

EURUSD Forecast

The EURUSD broke above 1.0760 on Thursday only to close Friday’s session back below.

I wrote about how to tell if last week’s move was a breakout or fakeout, and given Friday’s price action, I’m leaning toward fakeout.

However, the concern with EURUSD is where the dollar index closed on Friday (see above).

It was a marginal close for the DXY relative to the yearly open, so I’m not entirely convinced of a continued dollar rally.

So although the EURUSD has given us a fakeout to trade next week, caution is needed until we have follow-through early this week.

Also, remember that next week’s events will trigger significant volatility for EURUSD.

GBPUSD Forecast

Last week, I wrote about a potential head and shoulders pattern on GBPUSD.

However, the pattern was never confirmed, nor did the pound break the October trend line I mentioned last week.

So there was never a short opportunity on GBPUSD.

The pound closed Thursday above 1.2540, flipping the level to new support.

Only a daily close back below this level would pique my interest in a short.

Until then, I’ll keep an eye on a potential rising wedge with an upper level that extends from the August 2022 high.

That level comes in near 1.2720 this week.

USDCAD Forecast

USDCAD is hanging onto the trend line support I’ve written about recently, but just barely.

Friday’s session punched below the 1.3330 support level but closed the day and week above it.

We’ll see how next week’s events affect USDCAD, but I’m keeping an eye on the 1-hour falling wedge pattern below.

A convincing break above wedge resistance would open up the 1.3450 resistance level and possibly signal a significant swing low for USDCAD.

Alternatively, a sustained break below the 1.3330 area would be bearish.

NZDUSD Forecast

The NZDUSD closed last week on the November trend line I mentioned recently.

That level comes in at 0.6130 and will be a critical factor in deciding the New Zealand dollar’s next move.

Bearish price action from the 0.6130 area would signal a return to 0.6000 support.

Alternatively, a daily close above the trend line would start to confirm a fakeout and open up levels like 0.6190.

The jury is out on where NZDUSD goes, but next week’s events will undoubtedly provide an answer.