Title: Weekly Forecast for DXY, EUR/USD, GBP/USD, USD/JPY, and Gold – Strategic Outlook for Major Pairs
Original Author: Justin McQueen via ForexFactory.com
Link to the Original Article: [ForexFactory Weekly Forecast](https://www.forexfactory.com/news/1370051-weekly-forecast-for-dxy-eurusd-gbpusd-usdjpy-and)
As markets digest last week’s economic data and global events, traders are preparing for what could be another pivotal week for major currency pairs and the broader directional momentum of the US dollar. With inflation trends, central bank signals, and macroeconomic themes influencing price action, this week’s commentary provides a roadmap for DXY, EUR/USD, GBP/USD, USD/JPY, and Gold (XAU/USD). We’ll assess recent developments, forecast key levels, and identify what currency traders should monitor closely in the week ahead.
DXY (US Dollar Index) – The Dollar Holds Steady After CPI Whiplash
Last week saw the DXY trapped in a push-pull dynamic between cooling inflationary pressures and cautious optimism toward Federal Reserve policy. The dollar’s modest retreat following a softer-than-expected US CPI report was partly offset by hawkish commentary from Fed officials later in the week.
Key Drivers from Last Week:
– US CPI showed inflation easing, taking pressure off the Fed to hike again
– Retail sales data remained relatively subdued, suggesting a cautious consumer
– Fed officials maintained a hawkish bias, walking back market hopes for early rate cuts
Looking Ahead:
– The focus this week shifts to PMI (Purchasing Managers’ Index) data and Fedspeak
– The Fed’s narrative remains crucial as the market seeks clarity on the next policy move
– Watch the US economic surprise index as an indicator of how data is outperforming or underwhelming expectations
Technical Analysis:
– Support: 104.00 (short-term), 103.50 (next confluence zone)
– Resistance: 105.10 (recent highs), 105.50 (key psychological barrier)
Forecast: Expect a consolidation phase in DXY unless a major data surprise or policy shift emerges. Traders should monitor real yields and risk appetite as additional clues for dollar direction.
EUR/USD – Bulls Gain Ground, but Face Resistance Headwinds
EUR/USD enjoyed a boost last week, pushing toward the 1.0900 handle in response to US data that weakened the dollar modestly. Improved Eurozone industrial production and resilient economic sentiment also lent support. However, gains may be capped amid underlying political tensions and limited ECB policy optimism.
Key Market Themes:
– US dollar softness favors short-term EUR/USD upside
– Market pricing shows fewer expectations of near-term ECB rate cuts
– Eurozone growth, while stabilizing, still shows uneven momentum
Factors to Watch:
– Eurozone PMIs (due Wednesday) could redefine short-term directional bias
– ECB policy commentary and inflation data later in the week
– Any geopolitical headlines from France or Germany could add volatility
Technical Levels:
– Support: 1.0820 (50-day SMA), 1.0770 (prior breakout level)
– Resistance: 1.0900 (psychological level), 1.0950 (key upside zone)
Outlook: A break and hold above 1.0900 opens the door to 1.0950 and possibly 1.1000 in the medium term. However, resistance remains strong amid Eurozone uncertainty and a still-evolving macro outlook.
GBP/USD – Sterling Bulls Regain Momentum, Eye Next Data Catalyst
The British pound broke through key technical resistance at 1.2650 last week, fueled by broad US dollar weakness and a slightly more hawkish tilt from the Bank of England (BoE) compared to market expectations. With the UK economy showing signs of moderate resilience, the pound could gain additional traction if key economic indicators deliver surprises.
Short-Term Catal
Explore this further here: USD/JPY trading.