Will the US dollar extend its downtrend next week, or are late shorts about to get squeezed?
Find out in today’s forex forecast video, where I break down my trades on DXY, EURUSD, GBPUSD, EURNZD, and XAUUSD.
US Dollar Index (DXY) Forecast
The DXY has started March on a bearish note, breaking below key levels like 105.00.
Although the US dollar index bounced from 103.50 support last week, dollar bulls struggled to gain momentum.
As mentioned in last week’s EURUSD video, the DXY trading below 105.00 on the weekly time frame is a bearish signal for the USD.
While dollar shorts could face a squeeze next week, there’s no reason to be long-term bullish on the dollar while the DXY remains below 105.00 on the high time frames.
EURUSD Forecast
EURUSD has had a strong run in the first half of March, with no clear signs of slowing down.
However, markets don’t move in straight lines forever, and at some point, EURUSD bulls will pay the price for chasing.
Thursday’s close below 1.0870 is the first sign of material weakness since the rally began on March 3rd.
The 1.0870 area is significant as it represents the November 2022 trend line.
While EURUSD closed above it on Tuesday, bulls failed to hold the level on Thursday.
Where Friday’s session closes relative to the 1.0870/80 region could be key for next week.
A sustained break below would expose 1.0777 support, while a move back above 1.0900 could signal the next leg higher.
That said, late EURUSD longs will likely face the consequences, as is often the case after extended rallies.
GBPUSD Forecast
GBPUSD started March with a strong bullish move above 1.2680 and the top of the January channel but has been relatively slow since March 6th.
One level I’m still watching is the top of the January channel, as discussed in recent videos.
It’s clear that the pound is treating this area as support, so a sustained break below could trigger a pullback next week.
That said, 1.2920 remains key support for GBPUSD until proven otherwise.
If a breakdown occurs next week, attention will shift to the 1.2800 support area, as that’s the most likely stop before GBPUSD makes a potential run at 1.3050 later this month.
EURNZD Forecast
Apart from booking profit on a 3R Bitcoin short, EURNZD is the only market I took action on last week.
As always all of my trades were shared with VIP Discord members in real time.
I shorted EURNZD on Tuesday from 1.9140, given the “heavy” price action at the 1.9096 key level from March 2020.
This is an early entry for what could be a much more significant setup if EURNZD breaks back within its September 2024 channel on the high time frames.
That would confirm a buy-side fakeout and open the door to lower levels like 1.8535, which is the December high and just above the 2025 open.
There’s also an open gap at 1.8535 from early March that could serve as a target should EURNZD confirm the buy-side fakeout next week.
XAUUSD (Gold) Forecast
XAUUSD broke out on Thursday, closing above the key $2,940 level.
Despite testing $3,000, gold bulls may not be finished yet, as the top of the December 2023 channel remains untested.
While a pullback next week is possible, it’s not a given.
If XAUUSD does retrace, $2,940 will be the key level to watch.
A retest of $2,940 is more likely to hold as support, considering gold already swept the $2,880 lows on February 28th.
That move cleared out a lot of sell-side liquidity and opened the door to higher levels.
Key support for gold is $2,950, with resistance at $3,000, followed by the top of the 2023 channel.
