Weekly Forex Forecast For July 24-28, 2023 (DXY, EURUSD, GBPUSD, AUDUSD, XAUUSD)

Trading the DXY, Euro, Pound, Australian Dollar, and Gold: Weekly Forecast for July 28th, 2023

In today’s video, we will be discussing the trading outlook for the DXY, Euro, Pound, Australian Dollar, and Gold for the week ending July 28th, 2023. We will analyze the key levels and trends in each market and provide insights into potential trading opportunities. Let’s dive right in.

US Dollar Index (DXY)

The US Dollar Index (DXY) has been trading within a long-term descending channel since 2011, forming lower highs and lower lows. However, last week, we saw a potentially significant development as the DXY closed back above the key support level around 100.8. Going into this week, Dollar Bulls will be looking for a reclaim of the 101.25 resistance level. The DXY is currently trading at the top of an ascending channel on the hourly timeframe, indicating a potential rotation higher early next week. However, the outcome will depend on the Federal Open Market Committee (FOMC) rate decision and statement on Wednesday. A sustained break below 100.8 could lead to a move towards 101, while a break above 101.25 could result in a rally towards 102.

EURUSD

The EURUSD has been trading within a descending channel, with a trend line off the highs from last year acting as a resistance level. Last week, we saw a fake out from the Euro, which could trigger a move lower towards the 1.1070 highs from earlier this year. However, before the rotation lower, we may see a retest of the resistance level around 1.1170 to 1.1180. The outcome will depend on the DXY’s movement, as a pullback towards 100.8 could lead to a rotation higher for the EURUSD. As of now, the Euro is in a fake out phase, and with the volatility expected from the FOMC meeting, we are looking for a move lower, but a rotation higher into the 1.1170 area is possible.

Pound (GBP)

The Pound has been trading within a channel since the lows in 2022, with a resistance level around 1.3. Last week, we saw a close below this level, indicating a short opportunity. The Pound is currently sitting on support around 1.285, with 1.29 acting as resistance. A sustained break below 1.285 could lead to a move towards 1.263, while a break above 1.29 could result in a retest of the channel highs. The Pound has already made a significant move lower, so caution is advised when considering short positions. However, a sustained break below the support level or a bearish price action at the resistance level could present short opportunities.

Australian Dollar (AUD)

The Australian Dollar has been trading within a range between 0.658 and 0.68. Last week, we saw a fake out above the range, followed by a move lower. The market is currently sitting on support around 0.67, with resistance at 0.672. If the DXY continues to reclaim levels, a rotation lower from the Australian Dollar is expected. However, if the DXY pulls back towards 100.8, we could see a move higher for the Australian Dollar. Short opportunities could arise if the market fails to break above 0.68 and shows bearish price action. The range lows around 0.6 could be potential targets if a breakdown occurs.

Gold (XAUUSD)

Gold has been trading within a range between 1940 and 1980, with support at 1940 and resistance at 1980. Last week, we saw a bounce from the support level, followed by a move towards the resistance level. The market is currently consolidating around the midrange level of 1960. A bounce towards 1970 and potentially 1980 is expected early next week, followed by a rotation lower towards the range lows. The DXY’s movement will play a crucial role in determining the direction of gold. A sustained break above 1980 could lead to further upside, while a break below 1940 could result in a move towards lower levels.

Frequently Asked Questions (FAQs)

Q: What is the DXY?

The DXY, or US Dollar Index, is a measure of the value of the US dollar relative to a basket of six major currencies: the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc. It provides traders and investors with an indication of the overall strength or weakness of the US dollar.

Q: What is FOMC?

FOMC stands for the Federal Open Market Committee, which is the monetary policy-making body of the Federal Reserve System. The FOMC meets several times a year to discuss and determine the course of monetary policy in the United States, including decisions on interest rates and other measures to control inflation and promote economic growth.

Q: How can I trade the DXY, Euro, Pound, Australian Dollar, and Gold?

You can trade these currency pairs and commodities through various financial instruments, such as spot forex, futures contracts, or options. It is important to have a solid understanding of technical analysis, market trends, and risk management before engaging in trading. Consider using a reputable broker and conducting thorough research before making any trading decisions.

Q: What factors can influence the movement of these markets?

The movement of the DXY, Euro, Pound, Australian Dollar, and Gold can be influenced by a variety of factors, including economic data releases, central bank announcements, geopolitical events, and market sentiment. It is important to stay informed about global economic and political developments that can impact these markets.

Q: How can I manage risk when trading these markets?

Risk management is crucial in trading. It is recommended to use stop-loss orders to limit potential losses and to set realistic profit targets. Additionally, diversifying your portfolio and not risking more than a certain percentage of your trading capital on any single trade can help manage risk. It is also important to stay disciplined and not let emotions dictate your trading decisions.