**Forex Mid-Week Outlook for DXY, EURUSD, GBPUSD, and XAUUSD – August 27, 2025**
*By Justin Bennett, Daily Price Action*
As the forex market advances into the last week of August 2025, traders remain vigilant for pivotal moves across major pairs and commodities. The US Dollar Index (DXY), the Euro (EURUSD), the British Pound (GBPUSD), and Gold (XAUUSD) are in focus as global macroeconomic developments and central bank policies continue to drive volatility.
This mid-week outlook examines key price levels, technical patterns, and scenarios for these markets, helping traders prepare for the trading days ahead.
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**US Dollar Index (DXY)**
After several weeks of persistent strength, the US Dollar Index begins to show signs of possible consolidation as it approaches multi-year resistance zones. Recent US economic data continues to bolster the greenback, supported by the Federal Reserve’s cautious stance on potential rate adjustments.
**Technical Picture:**
– DXY approaches major resistance at 107.50–108.00, a zone that acted as a formidable barrier in previous rallies.
– The daily chart reveals a sequence of higher highs and higher lows, a classic bullish market structure.
– However, RSI is flirting with overbought territory, suggesting an increasing risk of short-term pullbacks or ranging conditions.
– Key support zones appear at 106.00 and then at 105.20, coinciding with the rising 20-day moving average.
**Scenarios:**
– A firm rejection from 108.00 could spark profit-taking and a pullback toward immediate supports at 106.00/105.20.
– Sustained momentum above 108.00 would open the way to 109.30, potentially putting last year’s highs into focus.
– Watch macro triggers including upcoming US jobless claims, GDP data, and any fresh remarks from Fed officials.
**Trading Notes:**
– Shorter-term traders may consider benching long entries close to resistance unless a clear breakout is confirmed.
– Look for bullish continuation if DXY manages to close a daily candle above the 108.00 level, with confirmation on higher timeframes.
– If DXY breaks down below 105.20, anticipate a deeper move towards the psychological 104.50 handle.
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**EURUSD**
The euro remains pinned near its lowest levels since late 2022, pressured by structural strength in the greenback and rising market doubts about further ECB rate hikes. The absence of encouraging Eurozone data has exacerbated the downside for EURUSD.
**Technical Picture:**
– EURUSD is testing support just above 1.0750, an area that has previously functioned as a battleground for bulls and bears.
– A clean break lower threatens further losses toward the next support at 1.0650, marking the June 2023 swing low.
– The 1.0870–1.0900 area offers immediate resistance, aligning with both a downward-sloping trendline from the July high and the 50-day moving average.
– Daily momentum oscillators signal persistent bearishness, but there is early evidence of bearish exhaustion as volumes dry up near the base.
**Scenarios:**
– If sellers crack the 1.0750 level, bearish extension toward 1.0650 is likely, with a possibility of a spike move given the lack of nearby demand zones.
– A bounce from 1.0750 could offer short-term relief, but a close above 1.0900 is required to hint at a more meaningful reversal.
– Monitor Eurozone inflation and labor data, as well as US Treasury yields for cross-directional clues.
**Trading Strategies:**
– Price action traders may look for selling opportunities on rallies into resistance near 1.0870/1.0900, provided downward structure holds.
– Conservative buyers might wait for bullish engulfing patterns off support, looking for at least
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