**Weekly Forex Forecast for DXY, EUR/USD, GBP/USD, EUR/AUD, and XAU/USD (July 21–25, 2025)**
*Based on content by Justin Bennett, Daily Price Action*
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The foreign exchange market enters the week of July 21–25, 2025, after a spell of heightened volatility in global risk assets. Federal Reserve policy outlook, ongoing inflation concerns, and shifting risk sentiment continue to drive market momentum. This weekly forecast will analyze the technical and fundamental landscape for the US Dollar Index (DXY), Euro vs. US Dollar (EUR/USD), British Pound vs. US Dollar (GBP/USD), Euro vs. Australian Dollar (EUR/AUD), and Gold (XAU/USD). The insights are crafted to help traders recognize significant pivot zones and formulate robust trading strategies.
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## US Dollar Index (DXY)
The DXY heads into the week following a sharp rally that reinforced its position above key technical support. The greenback remains sensitive to both global macroeconomic sentiment and domestic data, especially as speculation swirls around the timing and magnitude of future Fed moves.
**Key Technical Levels:**
– **Support:** 104.70–104.90 zone, with a more critical base at 104.00
– **Resistance:** Immediate resistance at 106.00, farther level near 107.20
**Technical Outlook:**
– The US Dollar Index broke out from a multi-week consolidation, closing last week above the 105.50 mark.
– The clean break above 104.90, a level that served as critical resistance for several weeks, flips the area to support.
– Daily charts reflect an ascending channel structure, suggesting continued bullish momentum unless DXY closes back below 104.90 support.
**Fundamental Catalysts:**
– Markets are tuning in closely to US economic growth metrics and inflation data.
– Any dovish pivot by the Federal Reserve as a result of softer macro releases might undercut DXY’s recent strength.
– Conversely, higher-than-expected inflation or robust employment reports could drive DXY toward the 107.20 resistance.
**Trading Approach:**
– **Bullish Bias:** Above 104.90, look for buying opportunities on minor pullbacks.
– **Bearish Shift:** A decisive close below 104.90 may open the door for a deeper retracement toward 104.00 and, eventually, sub-104 levels.
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## EUR/USD
EUR/USD ended last week under pressure, as the euro struggled to regain lost ground against a resurgent US dollar. Macro uncertainty in the eurozone and divergent central bank trajectories are playing a pivotal role.
**Key Technical Levels:**
– **Support:** 1.0850, reinforced by 1.0800 and the psychological 1.0700 handle
– **Resistance:** Immediate resistance seen at 1.0960, further upside at 1.1040
**Technical Outlook:**
– The pair remains trapped in a descending channel with clear lower highs since early June.
– The 1.0850 level is acting as a critical support, stemming declines on multiple occasions.
– EUR/USD is trading below its daily 50-period moving average, hinting at a bearish structure unless reclaimed.
**Fundamental Catalysts:**
– European Central Bank rhetoric and eurozone inflation/PMI readings are likely to set the tone this week.
– Concerns about German growth prospects weigh heavily on the euro’s outlook.
– Any signs of economic divergence between the US and eurozone economies could exacerbate the pair’s moves.
**Trading Approach:**
– **Short Opportunities:** Rallies into the 1.0960–1.1000 area may offer attractive risk-reward for bears, especially if DXY remains elevated.
– **Reversal Watch:** A clean break above 1.1040 would neutralize the bearish bias and could signal a larger upward move toward the 1.
Read more on GBP/USD trading.