**Weekly Forex Forecast for DXY, EUR/USD, GBP/USD, and USD/JPY**
*By Justin Bennett*
As the forex market concludes another week of dynamic price action, traders continue to monitor major currency pairs for potential shifts in momentum and trend. This week, the focus remains strongly on the US Dollar Index (DXY) and its critical relationships with the euro (EUR/USD), British pound (GBP/USD), and Japanese yen (USD/JPY). A sustained trend in the dollar has ramifications across these major pairs, and understanding prevailing technical patterns is key to effective trading strategy.
This comprehensive forecast, informed by price action analysis and key levels, will help traders navigate the market’s next moves. Below, each pair is examined individually, followed by overarching themes impacting the forex market.
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### US Dollar Index (DXY) Outlook
The DXY measures the value of the US dollar relative to a basket of major foreign currencies. After recent volatility, the index is edging toward a crucial inflection point.
**Weekly Technical Recap and Chart Perspective:**
– The DXY closed strongly higher last week, surging to a three-week peak.
– Friday’s session printed a notable bullish engulfing candle, underlining persistent demand.
– The ongoing uptrend, visible since early 2023, shows resilience after a mid-May pullback.
– However, the index faces an immediate hurdle at the 106.10 resistance area, which previously capped rallies in late April and again during May’s initial high.
**Key Levels to Watch:**
– **Support:** Immediate support is noted at 104.60, a confluence of former resistance and the March swing high. A break below this would hint at deeper retracement, possibly toward 104.00.
– **Resistance:** 106.10 remains the operative resistance. A daily close above would open paths toward the 107.00 region.
**Analysis & Outlook:**
The DXY’s momentum suggests dollar bulls retain control, but the cluster of resistance zones above could induce near-term consolidation or rejection. Watch for reaction to 106.10: a clear push above would reinforce the case for extended strength. Conversely, failure to secure ground above may encourage a corrective phase back toward support.
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### EUR/USD Weekly Forecast
The euro continues to trade in opposition to the US dollar’s movements. After a mid-month bounce, EUR/USD is now probing critical downside levels.
**Technical Recap:**
– The pair tumbled from near the 1.0900 resistance, erasing all gains from late May’s recovery.
– A weekly close below 1.0800 magnifies bearish risk.
– The pair is consolidating above a significant support trend line stretching from November 2022, making this an inflection area for the single currency.
**Key Levels:**
– **Resistance:** 1.0800, previously support, now serves as immediate resistance. Above this, the 1.0860–1.0900 zone offers the next ceiling.
– **Support:** 1.0720–1.0740 marks a pivotal support region, with 1.0670 and then 1.0600 beneath as additional backstops.
**Trading Considerations:**
– Bearish momentum dominates while EUR/USD is below the former 1.0800 support.
– Only a decisive push back above this level would relieve immediate selling pressure.
**Forecast Summary:**
Given the close beneath 1.0800, downside risk is in focus. Watch for potential tests of the 1.0720–1.0740 region, and monitor the broader DXY movement for cues. If the dollar continues to climb, EUR/USD could accelerate toward 1.0670 in the week ahead.
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### GBP/USD Weekly Forecast
Sterling has displayed patterns similar to the euro, tracking a broader risk-averse tone and dollar strength. GBP/USD faces a pivotal support area that could set the tone for its next
Read more on GBP/USD trading.