In today’s Weekly Forex Forecast, I’m breaking down my exact trade plan for the DXY, EURUSD, GBPUSD, and XAUUSD.
Can the euro confirm last week’s bullish change of character on the 4-hour chart?
I explain that and more in today’s video.
US Dollar Index (DXY) Forecast
The DXY did what I was anticipating last week as the market rotated lower from the upper band of its distribution channel. It was a clean reaction using the same combination of channels and SMC structure concepts I always look for.
The key for next week is the 4-hour structure. The only low that matters for market structure is 98.60. That is the level that produced the last confirmed bullish break of structure (BoS).
We also have the September FVG sitting there, still unmitigated. I want to see price tag that level next week.
If buyers defend 98.60, the bullish structure remains intact, but only if the DXY then closes above 99.12. If we close below 98.60, that would shift momentum and give us a confirmed bearish Change of Character (CHoCH).
The focus next week is simple. DXY bulls must hold above 98.60 to keep the bullish narrative alive. A sustained break below on the high time frames would confirm a bearish CHoCH.
EURUSD Forecast
EURUSD is showing early signs of strength after confirming a CHoCH on the 4-hour chart. That happened when price broke above the 1.16668 high.
The level buyers need to defend is 1.1590. That is the low that produced the last valid break of structure.
As long as EURUSD stays above that low, the pair has room to continue higher.
But EURUSD still depends heavily on the DXY. Before I turn bullish on the euro, I need to see the dollar index below 98.60. Until then, I’ll take last week’s EURUSD bullish CHoCH with a grain of salt.
Admittedly, last week was a bit frustrating because the EURUSD came within a few pips of sweeping the equal lows I wanted. Still, we got the EURUSD rally, which was my base case last weekend.
The bigger picture remains bullish as long as 1.1590 holds. A confirmed break below that low would invalidate the CHoCH.
GBPUSD Forecast
GBPUSD hit the September FVG last week that I had my eye on. That level came from a clean three candle pattern on the monthly.
The pound came close to my ideal entry zone but didn’t quite reach it. I wanted a deeper move into the pocket that showed more confluence.
Even without that, the market reacted and pushed higher, so the short-term structure remains bullish.
The bigger question is whether this is the bottom for GBPUSD or simply a relief rally within the downtrend. Some recent highs only produced wicks and not closes.
That makes it difficult to confirm a true CHoCH on higher timeframes. The DXY holding above 98.60 adds to the uncertainty.
Several inefficiencies beneath GBPUSD still need to be filled, specifically near 1.3270. If the dollar bounces from 98.60, the pound could struggle.
For now, GBPUSD is bullish in the short term. The reaction from any pullback next week will tell us whether buyers remain in control.
XAUUSD (Gold) Forecast
Gold moved sideways last week, but the structure is unchanged. The 4-hour trend remains bullish, with a recent break of structure, confirming higher highs and lows.
I am watching a key pocket below current levels next week. It includes a weekly bullish FVG, a daily FVG, and a sell-side single print.
That entire area remains unmitigated. It would be a clean place for a pullback.
Last week I wanted to see gold trade into that pocket and print a lower timeframe bullish CHoCH. Instead, the market stalled and traded sideways.
The same setup is valid going into next week. As long as gold stays above the key lows just above $4,000, buyers remain in control.
The trend line below also supports the idea of continuation. I would never use a trend line on its own, but it does intersect with the $4,130 support area.
