**Mid-Week Forex Outlook for DXY, EURUSD, GBPUSD, and XAUUSD – August 6, 2025**
*By Justin Bennett, as originally published on Daily Price Action*
The forex market has entered the mid-week phase with some distinct technical shifts across major asset classes. This week’s price action sets up significant opportunities and risks for the US Dollar Index (DXY), the Euro (EURUSD), the British Pound (GBPUSD), and spot gold (XAUUSD). Analyzing these pairs through the lens of support, resistance, and key price patterns allows us to make informed projections as the week unfolds. Below is a comprehensive mid-week outlook for the leading FX pairs and gold, as observed as of August 6, 2025.
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### US Dollar Index (DXY): Testing Critical Lows
The DXY slipped further on Tuesday, approaching levels that have acted as pivotal support throughout the year. Recent volatility has pushed the dollar index to the brink of a breakdown that could shape price action for the remainder of the summer.
**Technical Highlights:**
– **Major Horizontal Support**: The DXY is testing the 101.20 horizontal level. This zone has underpinned prior recoveries, notably in February and late June.
– **Bearish Momentum**: Consecutive closes below 102.60 last week flipped that area from support to resistance. Sellers have since gained control.
– **Fibonacci Zone**: The latest drop finds the DXY pressing the 61.8% retracement of the October–January rally, reinforcing 101.20 as a dividing line.
– **Channel Watch**: A descending channel from March remains in play. A close below 101.20 targets the bottom trend line near 100.30.
**Implications:**
– **Further Downside**: Bears remain in control as long as the DXY stays below 102.60 on a daily closing basis. A confirmed breach of 101.20 paves the way to 100.30 and possibly the psychological 100 handle.
– **Intermarket Effect**: Sustained DXY weakness typically bids up EURUSD and XAUUSD, while GBPUSD also stands to benefit.
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### EURUSD: Eyes on Major Breakout
The euro has capitalized on the dollar’s slide, mounting an advance that challenges resistance from earlier in the year. This week’s action heightens the prospect of a technical breakout.
**Technical Highlights:**
– **Key Resistance**: 1.1050 remains the critical resistance area, stalling rallies in both February and April 2025. Price is once again hovering just beneath this region.
– **Bullish Structure**: The ascending channel from March is intact. Monday and Tuesday’s candles both tagged and respected the channel’s upper boundary.
– **Support Levels**: The 1.0890–1.0920 area, previously resistance in June, now serves as immediate support.
**Breakout Scenario:**
– **Bull Flag Potential**: The consolidation beneath 1.1050 resembles a bull flag pattern, a continuation structure likely to resolve to the upside if confirmed.
– **Targets**: A daily close above 1.1050 would set up a run toward 1.1200, with secondary extension targets around 1.1275–1.1300, corresponding to the 2024 swing highs.
**Risks:**
– **Failures at Resistance**: If euro bulls fail at this barrier and the DXY finds footing above 101.20, a pullback to the 1.0890–1.0920 region is probable.
– **Trend Reversal**: A sustained move below channel support, now at 1.0870, would neutralize bullish momentum for the week.
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### GBPUSD: Threading a Tight Range
The British pound continues to oscillate within familiar territory, caught between well
Read more on GBP/USD trading.