**Weekly Forex Forecast for DXY, EUR/USD, GBP/USD, USD/JPY**
*Adapted and summarized from the original analysis by Haitham Alaa for Forex Factory.*
As the forex market moves into the coming week, the key pairs—namely DXY (US Dollar Index), EUR/USD, GBP/USD, and USD/JPY—are positioned at critical technical levels amid shifting economic fundamentals and diverging monetary policy narratives from major central banks. Below, we break down the technical and fundamental outlook for each of these key instruments, looking at past price action and potential scenarios that may unfold over the coming sessions.
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## DXY – US Dollar Index
### Recent Performance
– Last week, DXY posted a modest gain, rebounding from previous losses and closing higher for the week. The move was partially fueled by hawkish commentary from several Federal Reserve officials, even as the FOMC signaled three rate cuts in 2024 during its recent policy meeting.
– The upward pressure on the dollar came against a backdrop of resilient US economic data, including an uptick in retail sales, occupation numbers that continue to surprise on the upside, and inflation readings that have shown some stickiness.
### Technical Analysis
– **Support**: The 200-day SMA near 103.50 remains a critical support zone. Week-on-week, DXY found buyers emerging at this level, underpinning the recent rebound.
– **Resistance**: The 105.00–105.30 area is the major resistance to watch. This was a previous supply zone and a failure here could see the index ranging rather than trending.
– **Charts**: On the daily chart, the recent candle formations indicate indecision and potential consolidation. Momentum is neutralizing, with the RSI hovering around the 50 level.
### Fundamental Drivers
– The market’s renewed expectations for a delayed start to Fed rate cuts have contributed to a firm undertone for the USD.
– US economic data in the coming week, especially the PCE inflation report and GDP (second estimate), are likely to be pivotal.
– Risk sentiment, particularly related to geopolitical developments, also has the potential to drive dollar flows.
### Scenarios for the Week Ahead
– **Bullish Bias**: If support near the 103.50 level holds and US data continues to surprise to the upside, DXY could probe higher toward the 105.00–105.30 resistance band.
– **Bearish Bias**: A sustained move below 103.50 would open the door to further downside, targeting the 103.00 followed by the psychological 102.50 level, where buyers might look to re-enter.
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## EUR/USD
### Recent Performance
– EUR/USD came under renewed selling pressure last week, logging a fresh multi-week low and testing the 1.0700 handle as the European Central Bank maintained a dovish tilt.
– Market pricing for a June ECB rate cut has now increased, as several policymakers signaled an openness to easing amid a subdued inflation outlook.
### Technical Analysis
– **Support**: The 1.0700 area is acting as immediate support. Below this, 1.0650 is the next key level, which coincides with previous swing lows.
– **Resistance**: The pair faces resistance at the 1.0780–1.0800 zone, followed by the 200-day SMA at 1.0835 which capped prices in previous weeks.
– **Momentum and Structure**: The daily chart shows a clear bearish structure, with lower highs and lower lows forming. The RSI has dipped below 50, indicating the momentum is with the sellers.
### Fundamental Drivers
– Comments from ECB officials will remain in focus as the central bank faces slowing growth and continues to project a soft inflation path.
– This week’s release of the German IFO survey, as well as eurozone CPI and unemployment figures, could offer further cues for the EUR.
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Read more on GBP/USD trading.