The US dollar (DXY) remains indecisive, but how might that affect pairs like EURUSD, GBPUSD, and USDJPY?
Watch today’s Weekly Forex Forecast to find out!
Let’s begin!
US Dollar Index (DXY) Forecast
The DXY has been sideways since the start of February, making much of the Forex market difficult to read.
That said, the technicals we’ve discussed recently are still holding up.
Namely, key support between 103.50 and 103.80.
That’s a must-hold area for dollar bulls, with resistance coming in at 104.45 and 105.00.
A sustained break below 103.50 would be bearish toward 103.00, while a break above 104.45 would be bullish toward 105.00 and 105.80.
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EURUSD Forecast
Like the DXY, the EURUSD has been mostly sideways for the last month.
Even the second half of January didn’t offer much momentum for traders.
The key levels I’m watching this week include 1.0790 and 1.0850.
However, bulls will find even more resistance above 1.0850 due to the 2022 trend line, which comes in near 1.0880.
Bears, on the other hand, need to force a daily close below 1.0790 to expose 1.0730.
As much as many readers of this website don’t like to hear it, this is one of those times where a seat on the sideline is warranted until a clear signal is offered.
GBPUSD Forecast
While the DXY and EURUSD have been sideways since February, the GBPUSD has been locked in a 300-pip range since December.
I can’t remember the last time the pound was this indecisive, which is why I haven’t pulled the trigger on a trade despite our technicals holding up relatively well.
Note how GBPUSD is holding below descending channel resistance near 1.2700, which may come into play early this week.
It looked as though Thursday’s candle closed below 1.2635, but Friday’s session had other plans.
So, for now, GBPUSD is a waiting game to see if bulls can clear those 1.2700 highs, or if support breaks for a run at the 1.2500 lows.
USDJPY Forecast
USDJPY remains above the 149.70 support I’ve discussed recently, but
However, the pair broke below the 2024 ascending trend line on Thursday, and retested the level as new resistance on Friday.
While this doesn’t mean USDJPY will move lower this week, it isn’t a great sign for bulls.
If USDJPY loses 149.70 support on a daily closing basis, the next key levels are 148.35 and 146.50.
But don’t be surprised if we see one last push into the 152.00 multi-year resistance, as these levels often serve as magnets for price.
The USDJPY is another case where patience is needed for a clearer picture of what the market intends to do.
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