In today’s SMC outlook I am sharing my exact trading plan for the DXY, EURUSD, GBPUSD, USDJPY, and gold. This is for educational purposes only.
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DXY Outlook
The DXY is still trending lower on the four hour chart with a clean series of lower highs and lower lows.
We have also broken several internal structures during the slide, so the broader outlook remains bearish.
Buyers still need to defend the key external low from the last bullish break of structure. Every low since then has been internal, and we never closed above the most recent high, so that level remains the line in the sand.
Below price, we have sell side targets like the open gap at 97.71 and the daily fair value gap near 97.07. Those inefficiencies could easily attract price if the downtrend continues.
My plan stays the same.
I cannot short the dollar until we get a retracement into premium. I need price to rotate up into the OTE pocket from the last swing high. That zone also lines up with a daily fair value gap and a daily order block, which gives me a clean area to watch for shorts.
I am also watching the angle of delivery. A sharp pop back into the range would hint at strong buyers stepping in. A slower grind into premium would keep me focused on bearish opportunities.
EURUSD Outlook
EURUSD already printed a four hour change of character after clearing the external high and forming a higher low before the break. Some traders call this CHoCH plus, and it fits the structure here.
Even with that shift, I cannot buy where price sits now because my rules require a move into discount first. The OTE sits inside an unmitigated daily fair value gap, which creates a clean area of interest for next week.
There is no guarantee we get that pullback.
If the euro ranges and then breaks higher, I simply step aside. My rules keep me from buying high. These discount pockets have worked well in healthy trends, and we have seen multiple examples in recent months.
I am also watching the December value area high from the TPO profile. The euro spent most of the month inside that range, and those levels can act as support or resistance. If price trades into that zone next week, I will drop to a lower timeframe and look for a change of character.
GBPUSD Outlook
GBPUSD tapped the 1.3434 region last week, which is a seven month composite point of control and the midpoint of the entire range. Price spiked a few pips above it before reversing, which tells me sellers were waiting.
The uptrend is still intact.
We have a clear break of structure to the upside and the external low remains protected. There is also an unmitigated four hour fair value gap below that could produce a reaction if we get a pullback.
What interests me most here is how the pound compares to the euro.
GBPUSD is already retesting its consolidation highs while EURUSD is nowhere near its own.
These pairs often move together, so if the euro drops into discount next week, the pound could be signaling what comes next. If GBPUSD breaks its external low while EURUSD is still tapping support, that would be a red flag.
For now I stay with the trend. If the external low holds, I will look for bullish setups. If it fails, we could see a deeper move into sell side inefficiencies.
USDJPY Outlook
USDJPY respected the area of interest I shared with VIP members earlier this week.
That zone at 155 lined up with a daily order block, a four hour fair value gap, and a four hour bullish change of character. It produced a strong bounce.
Even so, Friday’s price action is still internal. We have not cleared the external high of the current downswing, even on the 15 minute chart. Until that high breaks, the structure for this leg remains bearish.
There are also inefficiencies below that may fill before the next move higher. Areas near 155.3 to 155.5 stand out as potential rebalancing zones.
The higher timeframe trend is still up, but the DXY matters here too. Even though the yen has a low weighting in the dollar index, both charts move similarly. If the DXY weakens further, that could limit upside on USDJPY.
XAUUSD Outlook
Gold continues to trend higher after two clean breaks of structure, and buyers remain in control.
The only issue is that we never got the deeper pullback I wanted the last two weeks.
There was a clean void and a weekly fair value gap below that never filled, so I still want to see gold rotate into discount before looking for longs.
I stick to my rules, so I need to see gold pull back into discount before looking for longs. The OTE for this leg sits on top of a daily fair value gap and a two week composite point of control. That creates a defined area of interest between roughly 4209 and 4238.
If price trades into that region next week, I will look for a lower timeframe change of character. My first target would be the most recent high, and the second target would be the equal highs further above.
If gold loses the external low beneath that zone, the internal structure begins to shift and I would step aside. As long as the trend stays healthy, discount is where I want to position myself.
