Can the US dollar continue higher after last week’s breakout?
Watch today’s video to find out what it means for the DXY, EURUSD, GBPUSD, and AUDUSD.
US Dollar Index (DXY) Forecast
The DXY broke through 102.60 resistance this week, which is a potentially significant development for the US dollar.
The 102.60 region is the bottom of the 2023 channel and a key horizontal area dating back to August 2023.
If the DXY can hold above 102.60 on the daily and weekly charts, a 104.00 retest could be next.
Alternatively, a sustained break below 102.60 on the daily chart would suggest a failed breakout and expose 102.00.
EURUSD Forecast
EURUSD fell to fresh multi-month lows this week as the DXY broke 102.60.
This move from the euro was anticipated, given the failed breakout in August.
However, the selloff has stalled at the 1.0900 support level, which leaves EURUSD trapped between support and 1.0950 resistance.
I think the DXY is the better barometer for euro strength or weakness next week, especially regarding the DXY 102.60 level.
GBPUSD Forecast
GBPUSD has been sideways to lower this week, making it somewhat difficult to trade.
However, as noted last week, the weekly time frame closing below 1.3250 earlier this month hints at a potential top.
That said, timing is critical.
In my opinion, a retest of the 1.3200 to 1.3250 region as new resistance would be ideal for those looking for short entries.
With that said, I’m not confident GBPUSD can reach that high without the DXY losing 102.60 support.
AUDUSD Forecast
AUDUSD trended lower last week following the failed breakout above the January trend line.
I discussed this as a trade idea last weekend.
Unfortunately, this AUDUSD setup was a little more challenging to trade, as the pair never offered a retest of 0.6840 as new resistance.
We’re getting a bounce from the Australian dollar at 0.6700, a support area I’ve outlined for the last few months.
For next week, I’d keep a close eye on the 0.6800 region, as it should attract sellers.
Another level to watch is the August trend line that extends from the August 5th closing price.
Be sure to watch the video above for details.
