Will the US dollar extend its decline or rebound from the December 2023 low?
Watch today’s video for key market insights to guide your trading on the DXY, EURUSD, GBPUSD, EURCAD, and XAUUSD in the week ahead.
US Dollar Index (DXY) Forecast
The DXY continues to struggle to rebound from the December 2023 low at 100.85.
We saw a decent bounce on Thursday, but Powell’s comments today are once again weighing on the dollar.
However, as long as the DXY stays above the 100.80 area, it remains above key support.
That said, symmetry could favor a DXY breakdown toward the 2023 low at 99.60.
This move would complete the October 2023 descending channel and could potentially offer the first opportunity to consider dollar longs.
Until then, I’m cautiously bearish on the US dollar.
EURUSD Forecast
EURUSD is extending its bullish momentum with a surge above 1.1140 today.
A sustained break above this level opens the door to the 2023 high at 1.1275.
This move would complement the DXY’s potential slide toward its 2023 low, completing the descending channel mentioned earlier.
There’s also a significant descending channel on the EURUSD, extending from the 2010 high, which comes in near 1.3600.
Whether the euro climbs that high remains to be seen, but it’s certainly within reach given the recent momentum.
GBPUSD Forecast
GBPUSD is also attempting a breakout above its 2023 high at 1.3140.
However, the top of a channel from late May is giving bulls some trouble today.
Like EURUSD, a sustained break above this 1.3140 region would expose higher levels next week.
There’s a multi-decade channel that could come into play in the 1.3450 region if GBPUSD can hold above 1.3140 going into next week.
That will most likely line up with the DXY’s completion of its 2023 descending channel.
EURCAD Forecast
EURCAD is currently caught between two forces.
On one hand, the euro has shown significant strength against the US dollar.
On the other, the Canadian dollar has gained considerable ground across the board due to the weaker US dollar.
While this mix isn’t ideal from a strength/weakness perspective, the EURCAD technicals are worth watching next week.
The pair has respected an ascending trend line since the start of August, so any sustained breakdown could open up lower levels.
However, shorting EURCAD while it remains above the August trend line near 1.5080 is ill-advised.
XAUUSD (gold) Forecast
XAUUSD has been mostly sideways but is respecting our technical levels well.
Gold was rejected from the short-term ascending channel on August 20th and is bouncing today from the confluence of support near $2,480.
I’ve discussed both levels in detail in recent VIP member videos.
If gold can hold above $2,480 next week, it has the potential to test the confluence of resistance between $2,550 and $2,560.
However, a failure to hold above $2,480 would confirm a fakeout and expose channel support near $2,430.
