The US Dollar Index (DXY) broke down last week, sending pairs like EURUSD and GBPUSD surging higher.
But can dollar bears sustain last week’s move, or is the bottom in for the USD?
Watch today’s Weekly Forex Forecast to find out!
Let’s begin!
US Dollar Index (DXY) Forecast
The DXY broke down last week, closing below the 103.50 and 103.00 key levels.
However, the DXY found support at 102.60 on Friday, but dollar bulls have their work cut out for them next week.
That’s because the 103.00 area is now resistance for the DXY.
If bulls can secure a daily close back above 103.00, it would expose the 103.50 to 103.80 area.
On the flip side, a sustained break below 102.60 would expose 101.90.
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EURUSD Forecast
EURUSD broke above 1.0900 last week, which keeps the pressure on the 1.1000 key level.
Last week’s breakout also took the euro above the 2022 trend line we’ve discussed several times on this website.
As long as the EURUSD is above the 1.0900 mark on a daily closing basis, the short-term uptrend is intact with 1.1000 being the next key resistance.
Alternatively, a sustained break below 1.0900 on the higher time frames would suggest a fakeout and expose 1.0790.
GBPUSD Forecast
GBPUSD closed above the descending channel resistance at 1.2680 on March 4th.
Those who’ve followed along for the last few weeks will be very familiar with this level.
However, longs near 1.2700 were challenging, given the multiple swing highs from late 2023 and early 2024.
Last week’s GBPUSD close means 1.2825 and the 1.2770 areas are now must-hold regions for bulls.
If the pound can stay above those levels on the higher time frames, a run toward 1.3000 and possibly 1.3140 seems likely.
Alternatively, a sustained break below 1.2825 and especially 1.2770 would negate last week’s breakout and expose lower levels.
EURJPY Forecast
The EURJPY is one of the better-looking setups in the Forex market.
We’ve seen the pair move within a massive ascending channel since 2022, and just recently the EURJPY could be carving a lower high.
Combine that with Friday’s break below 161.70, and we could have a short setup on our hands this week.
The 161.70 area is also the intersection of the December trend line, which also broke down last week.
Any retest of the area as new resistance should attract sellers, with key support coming in at 158.60.
Of course, a sustained break back above 161.70 would suggest renewed strength for EURJPY.
However, I like the idea of looking for shorts on strength while the pair is below that mark.
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