Markets remain mostly sideways, but next week’s price action could finally bring a few solid setups.
Watch today’s video to see how I’m trading the DXY, EURUSD, GBPUSD, NZDUSD, and SPX next week.
US Dollar Index (DXY) Forecast
The DXY broke down earlier this month from a trend line I discussed in last weekend’s forecast.
The US dollar’s drop from the 107.20 area flipped that level to resistance last week.
While the DXY could test 106.00 support or even 104.60 in the coming weeks, the recent price action suggests shorts may be at risk.
The US dollar index appears to be coiling in a way that could trigger a short squeeze next week.
However, a daily close above the November trend line at 107.10 would be needed to confirm that outlook.
Until then, the DXY remains range bound between 107.10 resistance and 106.00 support.
EURUSD Forecast
EURUSD continued to range last week, leaving little opportunity for traders like myself.
The pair has chopped around 1.0460 this week, raising questions about its next big move.
As mentioned with the DXY, there’s potential for a squeeze on euro buyers next week if EURUSD closes below 1.0460.
But even that isn’t enough for me to take a trade.
I can’t justify entering until the pair offers a clearer signal from the extremities of the current range.
GBPUSD Forecast
GBPUSD bulls have cleared several key levels in recent weeks, including 1.2500 and now 1.2617.
That could open the door to the 1.2800 high, but buyers should keep an eye on the DXY for reasons discussed earlier.
Next week, key resistance comes in at channel resistance near 1.2770, while support sits at 1.2617.
NZDUSD Forecast
NZDUSD recently tested a key level from October 2022, marking an important moment for the pair.
Since then, price action has been choppy, which aligns with the broader forex market.
The big question is whether NZDUSD is forming a macro rounded bottom or just consolidating before another move lower.
We’ll have to wait for that answer, but in the meantime, traders could look to trade the range within the ascending channel.
Resistance comes in at 0.5770 and extends to 0.5820, while support sits at 0.5700 and 0.5630.
S&P 500 (SPX) Forecast
Despite being range-bound, the SPX has some of the cleanest price action of any market right now.
That’s not saying much given how sideways markets have been, but SPX still looks appealing to me.
I announced a short entry in the VIP group earlier today, which is already in profit.
The key to seeing lower levels next week lies at 6,080 to 6,100.
A daily and weekly close below this region would flip 6,100 back to resistance and expose the 6,000 mid-range.
This setup could resemble what we saw in late January from 6,100, but time will tell.
