**Weekly Forex Forecast: DXY, EURUSD, GBPUSD, and XAUUSD (December 8-12, 2025)**
*Authored by Justin Bennett, as originally published on Daily Price Action*
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As global markets approach the mid-December stretch, volatility continues to grip the currency and precious metals markets. With major central banks and policymakers providing insights and hints toward the forthcoming monetary policy direction, traders should keep a sharp eye on key technical levels as well as underlying fundamentals that may drive price action for the US Dollar Index (DXY), EURUSD, GBPUSD, and XAUUSD.
Below is an in-depth look at the likely scenarios for the abovementioned pairs and gold for the trading week ahead.
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### US Dollar Index (DXY)
The DXY’s recent price action has been defined by its struggle to hold above critical levels on the back of evolving rate expectations and weaker-than-expected US economic data. Last week, the index failed to break above its key resistance, and this rejection may have significant implications on both the short- and medium-term direction for the dollar.
**Technical Analysis:**
– The DXY has carved out a descending channel from the October high, consistently respecting both its resistance and support trend lines.
– Last week’s push above the 104.20 level was quickly reversed, trapping buyers and sending the index back below 104.00 by the Friday close.
– The primary support now comes in at 103.50, a key horizontal region that has acted as a pivot since October.
– Immediate resistance lies near 104.25, aligned with the upper boundary of the channel.
– If sellers maintain pressure below 103.50, the index could extend its slide toward the next major floor at 102.65.
**Key Takeaways:**
– Watch for sustained closes below 103.50 for potential continuation lower.
– A move back above 104.25 would be needed to reinvigorate bullish sentiment.
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### EURUSD
The euro has shown resilience against the US dollar, buoyed primarily by a weaker greenback. The reversal from sub-1.0700 levels in mid-November has seen EURUSD reclaim lost ground, approaching significant confluence areas that may dictate the next directional move.
**Technical Analysis:**
– EURUSD continues to trade within a broad ascending channel dating back to the September lows, with the lower boundary around the 1.0550 mark and upper limit above 1.1100.
– Resistance remains strong at the 1.0930-1.0950 region, coinciding with multiple swing highs from July and November.
– The former resistance of 1.0820, now turned support, held firm through last week’s spike in volatility.
– Key Fibonacci retracement levels cluster within this zone, further accentuating the importance of 1.0820 as a line in the sand.
**Trading Scenarios:**
– A decisive break and daily close above 1.0950 would open upside risk toward 1.1040 and possibly 1.1115.
– Alternatively, a clear rejection from resistance and a break under 1.0820 could expose EURUSD to a drop back toward 1.0700 and the channel’s lower edge near 1.0550.
**Fundamental Factors:**
– Traders should monitor the ECB’s evolving guidance, particularly around inflation expectations and forward guidance for Q1 2026.
– US economic surprises and 10-year Treasury yield movements will also feed into EURUSD short-term volatility.
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### GBPUSD
Sterling continues to outperform following surprisingly robust inflation prints and slightly more hawkish Bank of England rhetoric. The focus for GBPUSD lies squarely on a critical technical breakout as the pair tests multi-month highs.
**Technical Analysis:**
– GBPUSD remains inside a well-defined upward channel traced from the September swing low.
– Price stalled near the 1.2720-1
Read more on GBP/USD trading.