Title: Weekly Forex Forecast: DXY, EUR/USD, GBP/USD, and NZD/USD Outlook
Original Analysis by Justin Bennett | Source: ForexFactory.com
As markets transition through central bank updates and back into traditional price action flows, traders continue to seek clarity from the U.S. dollar’s path and its impact on major currency pairs. The following analysis outlines the technical landscape and key levels to watch for the U.S. Dollar Index (DXY), EUR/USD, GBP/USD, and NZD/USD for the upcoming week. These insights are based on the article “Weekly Forex Forecast for DXY, EURUSD, GBPUSD, NZDUSD” by Justin Bennett, and expand on his original observations with additional context and interpretations for clarity.
US Dollar Index (DXY) Technical Outlook
The U.S. Dollar Index remains a core measure of the dollar’s performance against a basket of major currencies. Last week’s price action continued to respect key support and resistance zones, providing technically significant behavior as the market assessed developments around interest rates and inflation data.
Key Technical Observations:
– The DXY bounced from trendline support last week, which has been in place since January 2023.
– This ascending trendline reinforces ongoing bullish structure despite temporary pullbacks.
– Bullish continuation depends on the index maintaining a weekly close above the 104.60–105.00 resistance area. Failure to sustain this level may result in further consolidation or breakdown.
– As long as this ascending trendline holds, the broader bias remains in favor of the dollar bulls.
Levels to Watch:
– Support: 103.90 (trendline), 103.60
– Resistance: 104.60, 105.00, 105.60 (multi-month key pivot)
A close above 105.00 would open up room for a retest of 105.60 and potentially 106.50, provided the macroeconomic backdrop remains favorable to the greenback.
EUR/USD Outlook
The euro continues its struggle to gain upward traction against the U.S. dollar as EUR/USD remains locked in a bearish channel. Despite efforts by bulls to lift the pair through overhead resistance, price structure remains tilted downward on weekly timeframes.
Key Technical Observations:
– EUR/USD remains below a descending trendline from December 2023 highs, currently intersecting near 1.0880.
– Rejection from the resistance zone near 1.0880 during last week’s trading reaffirms the bearish pattern.
– Short-term bullish attempts regularly meet supply above 1.0850, making this a difficult barrier to cross without a high-impact catalyst.
Support and Resistance Levels:
– Resistance: 1.0850, 1.0880 (trendline), 1.0960
– Support: 1.0650, 1.0600, 1.0520
Key Trading Considerations:
– The longer EUR/USD remains beneath the descending trendline, the higher the risk of a breakdown through 1.0650 support.
– If bears push the pair through 1.0600, the next target would be the psychological 1.0500 handle.
– A sustained weekly close above 1.0880 is needed to reverse the bearish bias and shift momentum toward 1.0960 and 1.1050.
Fundamental factors such as ECB policy guidance and European inflation expectations will play pivotal roles in influencing euro strength or weakness across this quarter.
GBP/USD Forecast
The British pound has traded with more resilience compared to the euro in recent sessions. However, GBP/USD remains subject to heavy resistance pressure and could face downside risks if bullish efforts wane.
Recent Price Action:
– The pair reached a swing high at 1.2860 before retreating sharply, signaling a potential exhaustion point after an extended rally.
– Price recently broke back below the 1.2750 support-turned-resistance area, introducing short-term technical weakness.
– The bullish
Explore this further here: USD/JPY trading.