**Weekly Forex Forecast for DXY, EURUSD, GBPUSD, and XAUUSD: December 8-12, 2025**
*Original Analysis by Justin Bennett, Daily Price Action*
The forex market continues to display volatility as we head into the second week of December 2025. With significant macroeconomic catalysts on the horizon, including central bank decisions and key data releases, major currency pairs and commodities are at pivotal levels. This week’s forecast will focus on the US Dollar Index (DXY), EURUSD, GBPUSD, and Gold (XAUUSD), analyzing their price action and key technical levels to monitor.
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## US Dollar Index (DXY)
The US Dollar Index (DXY) remains the central pillar for forex market sentiment, influencing price action across all major pairs. The greenback experienced notable volatility last week, as traders reacted to mixed US economic data and shifting Federal Reserve expectations.
**Key Observations:**
– **Rejection at Resistance:** The DXY rallied early in the previous week but faced strong resistance near the 104.80-105.00 zone. Sellers quickly capped the advance, driving the index back below the psychological 104.00 level.
– **Support Reclaimed:** Despite the pullback, the index managed to reclaim the 103.50 support area. This level has acted as a significant pivot in recent months.
– **Daily Chart Structure:** The daily time frame continues to print lower highs, indicating a downtrend. However, the lack of decisive breaks below the 103.50 support suggests waning bearish momentum.
– **Fed Expectations:** With the market divided on the timing of future Fed rate cuts, renewed hawkish rhetoric could bolster the DXY. Conversely, softer US data or dovish signals would likely weigh on the dollar.
**Key Levels to Watch:**
– **Support:** 103.50 (key horizontal support); a sustained break below exposes 102.75 and potentially the 102.00 handle.
– **Resistance:** 104.00 (immediate resistance); 104.80-105.00 (major swing resistance).
– **Technical Bias:** Neutral to bearish below 104.00. Bulls need a daily close above 104.80 to regain control.
**Trading Notes:**
– Bulls should look for consolidation and reversal signals at 103.50 for potential long setups.
– Bears should wait for a confirmed break below 103.50 before targeting lower supports.
– Be alert to upcoming US inflation data and any pivotal Fed statements, which could ignite directional moves.
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## EURUSD
The Euro endured a choppy week against the US dollar, as it struggled to capitalize on dollar weakness. The pair continues to trade within a broader consolidation pattern, with both bullish and bearish opportunities emerging from current price action.
**Technical Overview:**
– **Range-Bound Structure:** EURUSD has spent the last several weeks oscillating between 1.0730 support and 1.0920 resistance, unable to establish a directional trend.
– **Bullish Momentum Fading:** Although the single currency briefly pierced the 1.0920 barrier, it failed to secure a daily close above this level, resulting in a swift pullback.
– **Dynamic Support:** The rising trendline from the October low, currently intersecting near 1.0730, continues to support the pair and will be a critical level this week.
**Key Levels:**
– **Support:** 1.0730 (confluence of horizontal and trendline support); a breakdown could accelerate losses toward 1.0640 and 1.0550.
– **Resistance:** 1.0920 (major horizontal resistance); above that, 1.1000 looms as psychological resistance.
– **Technical Bias:** Neutral, with risk skewed to the downside if 1.0730 fails.
**Trading Plan:**
– Bulls should watch for bullish pin bars or engulfing candles near 1
Read more on GBP/USD trading.