**Forex Mid-Week Outlook for DXY, EURUSD, GBPUSD, and XAUUSD (August 27, 2025)**
*Adapted from an article by Justin Bennett at Daily Price Action*
As the forex market pushes through the last days of August, traders are closely monitoring several major pairs and the US Dollar Index (DXY) for signals that will set the tone going into September. Given recent volatility driven by central bank commentary, shifting economic data, and thin summer liquidity, the interplay between technical and fundamental factors is particularly crucial this week. Below is a comprehensive outlook for the DXY, EURUSD, GBPUSD, and XAUUSD, offering traders actionable insights and highlighting the key levels that could dictate market direction in the days ahead.
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## US Dollar Index (DXY) Analysis
The DXY started the week holding onto the gains carved out earlier in August, with buyers maintaining control even as some US economic data showed signs of cooling. Market participants have been awaiting crucial Federal Reserve cues, which could cement expectations for the path of rates into year-end.
**Key Takeaways for DXY:**
– **Support Levels:** The DXY has found solid support near 104.00, a level previously acting as a pivot through much of July and August. Intraday dips toward this zone have been met with buying interest, suggesting the bulls remain in control.
– **Resistance Levels:** Immediate resistance lies around 105.15, just beneath the June highs and a confluence of prior swing highs from March and May.
– **Technical Structure:** The DXY is trading within a clear uptrend on the daily time frame, with the series of higher lows intact since mid-July. A sustained break and daily close above 105.15 would reinforce dollar strength and likely pressure risk assets, while a move below 104.00 could open the door for deeper retracements.
– **Fundamental Watch:** Markets remain sensitive to any surprise in inflation or jobs data, as well as the tone of Fed speakers. Any sign of shifting policy bias could catalyze outsized moves, particularly in quieter, late-summer trading conditions.
## EURUSD Outlook
EURUSD remains locked in a broad range, struggling to regain upside traction despite intermittent bouts of dollar weakness. The pair is still laboring under the weight of divergent economic prospects between the eurozone and the United States, compounded by conflicting signals from the European Central Bank.
**Key Levels and Structure:**
– **Support Zones:** The primary support for EURUSD this week is 1.0800, a level that has held on multiple occasions since July. Below this, minor support is seen at 1.0770, with a further downside target near 1.0725 if bears seize control.
– **Resistance:** On the top side, resistance sits at 1.0920, a key supply zone tested—and rejected—several times this month. Only a sustained break above 1.0920 would neutralize the broader bearish bias and signal more meaningful euro recovery.
– **Range-Bound Trading:** The pair’s daily chart shows the convergence of lower highs and higher lows, producing a tightening range. This often prefaces a breakout, so traders should be vigilant for an impulsive move outside the current boundaries.
– **Macro Considerations:** EURUSD will be highly reactive to both eurozone inflation prints as well as US labor market data. Weak eurozone growth and persistent inflation doubts, juxtaposed against U.S. economic resilience, keep the fundamental bias tilted in favor of the dollar for now.
## GBPUSD Analysis
GBPUSD entered the week testing significant technical support following a multi-week selloff. The British pound has been weighed by lackluster data and diminishing odds of further Bank of England tightening, even as wage growth continues to concern policymakers.
**Key Points for GBPUSD:**
– **Critical Support:** The 1.2620 region stands out as a must-h
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