**Forex Mid-Week Outlook for DXY, EURUSD, GBPUSD, and XAUUSD (August 27, 2025)**
*Credit: Justin Bennett, Daily Price Action*
The global forex market continues to present active trading opportunities as traders dissect significant moves on the US Dollar Index (DXY), Euro (EURUSD), British Pound (GBPUSD), and Gold (XAUUSD). As we approach the conclusion of August 2025, several key factors and technical setups demand close attention. In this mid-week outlook, we will analyze each of the major assets, highlighting the trends, technical zones, and potential trading scenarios for the days ahead.
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## US Dollar Index (DXY)
The DXY remains at the center of attention as market participants weigh ongoing data releases, central bank policy adjustments, and broader risk sentiment. Recent volatility produced a decisive move, testing key levels and providing an essential backdrop for correlated assets.
**Key Technical Developments:**
– The DXY registered a notable rally in recent sessions, pushing above the short-term resistance near 105.40.
– Price action reached the pivotal area around 106.00, marking a potential breakout from the June-July consolidation phase.
– This move followed better-than-expected inflation data, strengthening expectations for a more hawkish Federal Reserve stance.
**Technical Outlook:**
– **Support Areas:** Watch for immediate support at 105.40. Further downside could see buyers step in around 104.85 or below at 104.20, which aligns with the daily 50 EMA.
– **Resistance Levels:** Upside targets extend to 106.50, a confluence of psychological and former supply. A daily close above this region could open room toward 107.00 in September.
– **Momentum:** The RSI shows the index nearing overbought territory on higher timeframes, but no clear bearish divergence is present yet.
**DXY Key Points:**
– Bullish momentum is fueled by positive risk sentiment toward the USD.
– A sustained close back below 105.40 would weaken the bullish structure, potentially triggering a sharper correction.
– Focus on US economic data, as further surprises may accelerate volatility in the immediate term.
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## EURUSD
The EURUSD pair continues to grapple with an aggressive USD, weighed down by notable disparities in economic performance and central bank forward guidance. After failing to reclaim critical resistance, the Euro is navigating a precarious technical structure into late August.
**Technical Developments:**
– EURUSD failed to overcome the 1.0900–1.0920 resistance, reversing sharply lower and testing the 1.0780–1.0790 support area.
– The daily chart displays a pronounced descending channel since mid-July, with lower highs marking persistent selling activity.
– Sellers pressed the pair toward year-to-date lows, highlighting negative momentum.
**Support and Resistance:**
– **Immediate Support:** 1.0780, a level aligned with the July base structure and previous bounce zones.
– **Next Support:** 1.0720, followed by the psychological 1.0700 mark, both of which could attract dip buyers if the dollar loses steam.
– **Resistance:** 1.0840, a confluence of dynamic resistance and previous intraday highs. Further resistance stands at 1.0900–1.0920.
**EURUSD Outlook:**
– Recent price action suggests the downward trend remains intact. Only a decisive close above 1.0840 would signal potential trend exhaustion.
– Longer-term, watch for any break below 1.0720 to confirm a broader bearish extension.
– The EUR will remain sensitive to Eurozone macroeconomic data and ECB rhetoric, but the USD component is likely to drive immediate volatility.
**EURUSD Key Factors:**
– Recent sell-off correlates with US dollar strength rather than independent euro weakness.
– The persistent channel structure favors a bearish bias unless buyers regain control at higher resistance
Read more on GBP/USD trading.