**Weekly Forex Forecast for DXY, EUR/USD, GBP/USD, and NZD/USD**
*Source: Forex Factory, original author Justin Bennett*
—
The global Forex market continues to focus on the macroeconomic outlook as traders react to shifting expectations around inflation, recession risks, and central bank policy. Heading into the new week (June 10-14, 2024), volatility remains high with key economic data on deck and market participants digesting recent moves across the US Dollar Index (DXY), Euro (EUR/USD), British Pound (GBP/USD), and New Zealand Dollar (NZD/USD). This detailed forecast, crediting insights to Justin Bennett from Forex Factory, analyzes technical setups and fundamental influences shaping these major FX pairs.
—
## US Dollar Index (DXY): Awaiting Breakout as Uncertainty Reigns
The US Dollar Index has offered traders a mixed picture, fluctuating between key technical levels while awaiting fresh catalysts. Recent sessions saw the DXY finding support near the 104.00 region but struggling to regain upside traction above key resistance zones. The upcoming week will likely see volatility with US inflation data due and markets continuing to gauge prospects for potential rate cuts from the Federal Reserve.
**Technical overview:**
– The DXY trades within a defined range between the 103.90-104.00 support floor and resistance at 104.70-105.10.
– Price action has respected the rising trendline from December 2023, but upside momentum remains capped by horizontal resistance.
– A daily close above 104.70 would imply a break back into bullish territory targeting extended resistance at 105.25 and 105.70.
– Conversely, a failure to hold the 104.00 area could expose the index to further downside toward 103.40, with bears potentially looking to challenge 102.85 as the next objective.
– The Relative Strength Index (RSI) on the daily time frame remains neutral, suggesting a lack of immediate directional bias.
**Macro fundamentals:**
– The market’s focus is squarely on the upcoming US Consumer Price Index (CPI) inflation data and next week’s Federal Reserve policy decision.
– A hotter-than-expected CPI reading could revive bets for a hawkish Fed, bolstering the dollar.
– If CPI misses consensus forecasts, expectations for “higher for longer” rates may fade, possibly sparking a selloff in the greenback.
– Other factors to watch include headline US PPI prints and broader risk sentiment, especially with equity markets displaying signs of fatigue.
—
## EUR/USD: Rangebound as ECB Delivers a Dovish Cut
The Euro came under pressure last week after the European Central Bank (ECB) announced a long telegraphed quarter-point rate cut. While the move was widely anticipated, the accompanying dovish message undermined the euro’s appeal, especially as US macro data continues to outpace Europe. This saw EUR/USD slip from local highs, though the pair found some stability near 1.0800.
**Technical overview:**
– EUR/USD remains trapped inside a sideways channel, bounded by support at 1.0785-1.0800 and resistance near 1.0910-1.0940.
– The inability to clear the 1.0910 handle signals persistent seller supply, with buyers only stepping in on dips toward the 1.0800 base.
– Immediate focus is on whether bulls can defend the lower end of the range next week; a break below 1.0785 may pave the way for a retest of 1.0730, followed by 1.0665.
– A daily close back above 1.0910 would invalidate near-term bearish pressure, with upside targets coming in at 1.0980 and the psychological 1.1000 level.
– The 200-day moving average at approximately 1.0795 acts as dynamic support and will be closely watched.
**Macro fundamentals
Read more on GBP/USD trading.