Weekly Forex Forecast For May 6-10, 2024

The DXY, EURUSD, and GBPUSD are trading at key inflection points that could dictate the next big move.

Today’s video focuses on the key levels to watch, and how I’m viewing the recent indecision.

Let’s get to it!

US Dollar Index (DXY) Forecast

The DXY tested key support on Friday at 105.00.

We’ve discussed this level at length recently, given its role since September of last year.

It recently served as resistance in February and April, so it’s no surprise to see US dollar bulls step in to defend it as new support.

It’s unclear if bulls will manage to hold the DXY above 105.00, but shorting the US dollar while above this level is unfavorable.

As long as 105.00 support holds on a daily closing basis, the November 1st gap at 106.88 is exposed.

Only a sustained break below 105.00 would open up lower levels like the 104.50 and 104.00 areas.

EURUSD Forecast

On Friday, the EURUSD rallied toward the 1.0800 imbalance I mentioned in last Thursday’s video, which subsequently served as resistance before the weekend.

For now, the euro remains locked between 1.0730 support and 1.0800 resistance.

The pair is also in the middle of a range between 1.0600 and 1.0860, making trading the EURUSD a tricky endeavor.

A sustained break above 1.0800 would expose 1.0865, while a sustained break below 1.0730 would open up the 1.0600 region.

I don’t favor trading the EURUSD until we get some resolution.

GBPUSD Forecast

GBPUSD is trying to establish itself back above 1.2535, but the price action so far is less than convincing.

Friday’s rally served to “fill in” the April 10th imbalance, but it’s unclear if bulls have what it takes to push the pound higher.

Like the EURUSD, longing GBPUSD is unfavorable with the DXY holding above 105.00 support.

On the flip side, I can’t justify looking for GBPUSD shorts with the pair above 1.2535, not to mention the recent (unfavorable) price action.

As with the euro, the pound’s next move hinges on what happens with the DXY at 105.00.

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