• The USD/JPY outlook remains mildly positive after the Bank of Japan leaves rates unchanged.
• Analysts believe the upside may be capped by 145.50, observing a ranging behavior.
• Geopolitics could boost yen demand amid safe-haven flows.

The USD/JPY outlook remains slightly supported as the pair snapped a two-day winning streak after the Bank of Japan left the policy rate unchanged at 0.50%. Earlier this week, the pair saw a rise amid safe-haven flows triggered by the Middle East crisis.

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However, the yen bulls may struggle to find a meaningful trend as the Bank of Japan could postpone the rate hikes to the first quarter of 2026 due to tariff uncertainty. In the G7 meeting, the US and Japan could not reach an agreement on the tariffs. Japan’s Finance Minister Kato also stated that they have no plan to meet US Treasury Secretary Bessent. This is another factor that could cap yen’s gains. The US plans to impose 25% tariffs on Japanese vehicles and 24% tariffs on other imports.

According to the UOB analysts, the USD/JPY price may remain within a familiar range of 143.50 to 145.50 with the least probability of breaking the level.

On the other hand, the US dollar remains significantly weak amid last week’s dismal inflation figures. Moreover, the tariff uncertainty continues to linger, giving no room to recover. The currency is gradually losing its safe-haven status as well. Given the recent geopolitics, gold, and yen tend to perform way better than the dollar.

On the geopolitical front, the Iran-Israel conflict enters the fifth day with both sides aggressively attack. President Trump warned Iranians through Truth Social post to evacuate Tehran. A White House official clarified that the purpose of the post was to show urgency to bring Iran to the table for talks.

Investors are cautious as we head towards the FOMC meeting due tomorrow. The Federal Reserve is widely expected to keep rates on hold. However, the monetary policy statement is important to watch as market participants are keen about the policy path and number of cuts in 2025.

Key Events for USD/JPY Ahead

• Core Retail Sales m/m
• Retail Sales m/m

The core retail sales are expected to grow, while the retail sales may show a contraction.

USD/JPY Technical Outlook: Bullish Pinbar, Rising Trendline

The 4-hour chart shows a bullish pinbar and a rising trendline, lending enough support to the pair. Moreover, the price stays well above the 20-period SMA, which is another bullish sign. The RSI is at 56.0, heading north. These factors reveal that the buyers are mildly dominating. The immediate resistance comes at 145.00 ahead of 145.50.

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On the flip side, the close below the 20-period SMA could ignite the selling pressure leading towards a support at 144.00 ahead of 143.50.

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EUR/USD Analysis Summary Today

• Overall Trend: Strongly Bullish
• Today’s EUR/USD Support Levels: 1.1480 – 1.1400 – 1.1320
• Today’s EUR/USD Resistance Levels: 1.1600 – 1.1680 – 1.1770

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1370 with a target of 1.1520 and a stop-loss at 1.1260.
• Sell EUR/USD from the resistance level of 1.1630 with a target of 1.1300 and a stop-loss at 1.1700.

EUR/USD Technical Analysis Today:

Ahead of significant economic events this week and the escalation of global tensions over the past weekend, we anticipate strong and exciting volatility in forex markets this week. According to licensed trading platforms, the EUR/USD pair jumped to the 1.1632 resistance level, its highest in three and a half years, before experiencing a swift sell-off last Friday. This moved the pair towards the 1.1488 support level before it closed the week settling around 1.1550. This bullish movement in the EUR/USD pair may react to geopolitical tensions in the Middle East in the new trading week, following the Israeli attack on Iranian nuclear facilities, raising fears of a broader regional conflict.

Also, financial markets will closely monitor any progress in trade negotiations between the United States and its major partners. Meanwhile, attention turns to the G7 summit in Canada, where leaders of the world’s largest economies will meet to discuss major global challenges. It’s also a busy week for monetary policy decisions from global central banks. The US Federal Reserve, the People’s Bank of China, the Bank of Japan, and the Bank of England are all expected to keep interest rates unchanged.

Trading Tips:

The Euro’s gains may be vulnerable to collapse if investor risk aversion increases amid successive global tensions.

Will the EUR/USD Continue to Rise in the Coming Days?

Technically, the overall outlook for the EUR/USD price remains bullish so far. Its recent gains and the breach of the 1.1600 resistance have pushed some technical indicators, led by the 14-day RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) lines, to the brink of overbought readings. I anticipate that the EUR/USD will be a target for selling from above the 1.1600 resistance, especially if forex investors turn to buying the US Dollar as a safe haven amid global trade and geopolitical tensions. The nearest targets for the bulls are currently 1.1660, 1.1720, and 1.1800, respectively. These levels are sufficient to push all technical indicator readings into overbought territory.

Renewed selling of the Euro against the US Dollar is the more likely forecast given events in the Middle East and concerns about the military conflicts expanding to other countries. This threatens crude oil sources, leading to a setback for the future of global economic recovery, which would significantly harm the Euro. Based on the daily timeframe chart, the 1.1370 support level will remain a technical threat to the EUR/USD’s upward movement, as it could increase selling pressure towards the psychological support of 1.1200. At the start of this trading week, the EUR/USD is not anticipating any significant economic releases from either the Eurozone or the United States.

Impact of the Iranian/Israeli Conflict on EUR/USD Trading:

According to forex market experts, Israel’s strikes on Iran are stimulating a US Dollar rebound, causing the Euro to retreat against the US Dollar from its 43-month high. However, the EUR/USD pair saw a sharp decline to below 1.1520 on Friday, following the Israeli strike on Iranian nuclear facilities, amid escalating geopolitical tensions, a sharp rise in oil prices, and a decline in stock markets. According to trading experts at ING Bank, “We believe the starting point was already quite extended for this EUR/USD pair, and a return to the 1.14-1.15 range seems perfectly appropriate.”

Danske Bank noted that “the attack adds significant uncertainty to diplomacy, as US officials deny direct involvement and warn that it could hinder, or unexpectedly force, Iran into discussions.”

Overall, the Israeli strikes have added to the underlying trade and economic uncertainty. There is inevitably concern about any escalation as markets remain closed and safe-haven assets are increasingly sought. According to currency trading experts, “The geopolitical turmoil could temporarily distort the US dollar’s ​​downward trend and weigh on risk indicators.” They also point out that “the main difference from previous confrontations between Israel and Iran is the targeting of nuclear facilities, and while crude oil production does not appear to have been affected so far, markets must add a higher risk premium given Iran’s pivotal role in global oil supplies.”

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June 16, 2025 – Written by David Woodsmith

STORY LINK Pound-to-Euro Week Ahead Forecast: BoE Cuts to Weaken GBP Sterling

Foreign exchange strategists at RBC Capital Markets (RBC) see scope for the GBP/EUR exchange rate to strengthen to at least 1.20 over the next 2-3 months, provided risk conditions remain benign.

It does, however, forecast that the GBP to EUR rate will slide to 1.11 at the end of 2026.

In contrast, Scotiabank forecasts that the Pound Sterling can hold just above 1.20 against the Euro by the end of 2025

GBP/EUR dipped to 7-week lows during the week as evidence of a weaker labour market and GDP disappointment undermined the Pound. There was little net impact from the government spending review, although underlying reservations continued.

RBC sees a notable divergence between the short and medium-term views.

On a short-term view it commented; “As we head into the summer, GBP could stand to gain a bit more if markets settle into carry-hunting mode.”

The bank remains very cautious over the medium-term outlook; “As a long-term c/a deficit country, the UK runs a 280bn negative net international investment position with the rest of the world. It does not have the large stock of foreign assets invested in the US that the Euro area or Japan have.

RBC added; “It is also exposed to global trade wars as a small open economy and fiscally constrained in its ability to support growth through deficit spending.”

The Pound will inevitably be more vulnerable if the economy deteriorates.

The latest labour-market release suggested that there had been significant deterioration with a slide in payrolls, while unemployment hit a 4-year high and wages growth slowed more than expected.

GDP also contracted 0.3% for April after a 0.2% expansion the previous month.

HSBC commented; “our forecast is for a small fall back in Q2. That said, we should not over interpret. A negative GDP print in Q2 would not necessarily suggest recession risks, but payback from an artificially strong Q1.”

There are strong expectations that the Bank of England will hold interest rates at 4.25% in the week ahead. There is, however, speculation over more dovish guidance.

According to Danske Bank; “While markets have increasingly converged to our view of two further rate cuts from the BoE this year, we see risks further skewed to the downside. With slower activity and the scope for more aggressive BoE easing, we see this supporting our view a move higher in EUR/GBP, which we target at 0.87 in 6-12 months.” (GBP/EUR losses to just below 1.1500.)

According to Goldman Sachs; “We expect the labour market to loosen further in the coming months. A looser labour market is in turn likely to further reduce pay pressures.”

Commerzbank commented; “the market is now pricing in significantly more interest rate cuts by the Bank of England this year than at the beginning of the year. As we have emphasised several times, the path towards a stronger pound remains narrow, even if we do not want to overinterpret a single data release.”

Credit Agricole notes fundamentals reservations, but sees scope for Pound resilience; “Yet, as long as the UK economy continues to at least fare as well as the Eurozone, the GBP may still be able to eke out marginal gains over the EUR, especially as it retains a more compelling rate appeal.”

HSBC expects fundamentals will support the Euro; “Not only has the Eurozone growth narrative turned more positive following Germany’s large infrastructure and defence fiscal package, but the ECB has also returned the policy interest rate to the estimated neutral rate.

It added; “In contrast, the BoE has kept policy restrictive, some way above the estimated neutral rate. If UK data remain weak and CPI slows, markets may price more BoE rate cuts, which would likely weaken GBP against the EUR.”

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TAGS: Pound Euro Forecasts

• GBP/USD trades in a narrow channel above 1.3550 on Monday.
• The BoE and the Fed will announce monetary policy decisions later in the week.
• The near-term technical outlook suggests that the bullish bias remains intact but lacks momentum.

GBP/USD holds its ground at the beginning of the week and trades in a tight band above 1.3550. Although the technical outlook suggests that the bullish stance remains unchanged in the near term, investors could refrain from taking large positions ahead of this week’s highly-anticipated Federal Reserve (Fed) and Bank of England (BoE) policy meetings.

The US Dollar (USD) benefited from safe-haven flows on Friday and caused GBP/USD to end the day in negative territory, as geopolitical tensions escalated after Israel launched a military operation against Iran.

Over the weekend, Iran and Israel continued to exchange missile strikes. A spokesperson for the Israeli military said on Monday that Israel has destroyed one third of Iran’s surface-to-surface missile launchers and added that they have achieved aerial superiority over Iran.

Meanwhile, Iranian foreign ministry spokesperson Esmaeil Baghaei said on Monday that the Iranian parliament is preparing a bill to leave the nuclear Non-Proliferation Treaty (NPT) and added that they remain opposed to developing of weapons of mass destruction, per Reuters. Following these developments, markets remain relatively cautious, helping the USD stay resilient against its peers.

The economic calendar will not feature any high-impact data releases on Monday. Ahead of the Fed and the BoE meetings, Retail Sales data from the US on Tuesday and Consumer Price Index data from the UK on Wednesday could trigger short-lasting market reactions.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly above 50 and GBP/USD trades above the 20-period, 50-period and the 100-period Simple Moving Averages (SMA), suggesting that the bullish bias remains intact in the short term but lacks momentum.

On the downside, the 100-period SMA forms the immediate support level at 1.3530 before 1.3460 (static level) and 1.3425 (200-period SMA). Looking north, resistance levels could be seen at 1.3600 (mid-point of the ascending channel), 1.3630 (static level) and 1.3700 (static level, round level).

Platinum price activated the bearish correctional track in Friday’s trading after hitting the barrier at $1305.00, to gather some of the gains by reaching $1215.00 achieving the suggested initial target.

The continuation of the main indicators contradiction makes us keep preferring the correctional track, which might target $1185.00 and $1162.00 level, while renewing the bullish attempts requires providing positive closes above $1275.00 level, to increase the chances for reaching new bullish stations.

The expected trading range for today is between $1185.00 and $1260.00

Trend forecast: Bearish

Platinum price activated the bearish correctional track in Friday’s trading after hitting the barrier at $1305.00, to gather some of the gains by reaching $1215.00 achieving the suggested initial target.

The continuation of the main indicators contradiction makes us keep preferring the correctional track, which might target $1185.00 and $1162.00 level, while renewing the bullish attempts requires providing positive closes above $1275.00 level, to increase the chances for reaching new bullish stations.

The expected trading range for today is between $1185.00 and $1260.00

Trend forecast: Bearish

June 15, 2025 – Written by Tim Boyer

STORY LINK Pound to Dollar Forecast: 40-Month Best, but “Room for Downside Correction”

The Pound to Dollar exchange rate (GBP/USD) jumped to a 40-month high just above 1.3630 late on Thursday as the dollar came under further pressure.

There was, however, a sharp retreat to lows near 1.3520 on Friday following Israel’s military strike on Iranian nuclear facilities before trading just below 1.3550.

There was renewed demand for safe-haven assets while the slide in risk appetite undermined the Pound in global markets.

According to ING, GBP/USD may be able to avoid sustained losses; “Cable has potentially a wide room for downside correction given how expensive it looks relative to rate differentials. But we have seen how structurally bearish USD bets are preventing dollar gains from being sustainable. So, we’d be more cautious on that side.”

UoB commented; “The likelihood of GBP closing above 1.3640 will remain intact as long as 1.3515 is not breached. Looking ahead, should GBP close above 1.3640, the focus will shift to 1.3700.”

A break below 1.3500 – 1.3515 would suggest a sharper correction.

MUFG noted the shift in trading dynamics; “In the FX market the initial response has been a flight to safety which has benefitted the Swiss franc, yen and US dollar.”

Commerzbank currency strategist Michael Pfister expects caution will prevail in the short term; “Until the danger of further escalation has passed, safe assets are likely to remain in demand.”

Danske Bank added; “The attack adds significant uncertainty to diplomacy, with US officials denying direct involvement while cautioning that it could either hinder or, unexpectedly, pressure Iran towards discussions.”

MUFG commented; “Market participants will now be watching closely to see how the conflict develops and whether it will have an actual disruptive impact on global supply chains including importantly the supply of oil.”

Rabobank discussed the potential implications; “the war between Israel and Iran, the likely involvement of the US and the possible involvement of other countries in the region, will take center stage today and in the coming days. Which scenario is going to develop?”

According to the bank; “The best-case scenario, which markets seem to be pricing in, is a short and fast operation that will deliver Israel and the US a major geopolitical victory. However, in terms of probability of this scenario unfolding, how easy is it is to take out an entire country with a relatively strong military in 24-48 hours?”

It added; “There are several escalation scenarios. The worst case is a long, drawn-out war that spreads to Hormuz and/or Saudi/UAE, and to global sites via proxies.”

The Pound is also liable to be hampered by reservations over the domestic economy and speculation over more dovish Bank of England guidance at next week’s policy meeting.

Danske Bank noted the weaker than expected GDP data released on Thursday; “The data yesterday follows weaker than expected labour market data out earlier this week and highlights that the UK economy is experiencing more underlying weakness following a strong start to the year.”

There are still doubts whether the dollar can gain sustained support.

Scotiabank commented; “The relative loss of investor appetite for U.S. assets is increasingly becoming a forecasting issue. Concerns about U.S. fiscal plan(s) have led to a rise in U.S. borrowing costs that have spread to other markets.”

Traders are also still very wary over tariff developments. President Trump stated that higher tariffs would be extended to domestic appliances.

According to ABN Amro; “The overall impact on the economy would not be favorable, and the repercussions for financial markets could be significantly worse. This reputational damage has arguably been a major factor driving the dollar’s devaluation in recent months.

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TAGS: Currency Predictions Pound Dollar Forecasts

June 15, 2025 – Written by Frank Davies

STORY LINK Euro to Dollar Forecast: 1.16 by 2026, 1.20 by 2027 say Investment Bank

Commerzbank forecasts that the Euro to Dollar exchange rate (EUR/USD) will advance to 1.16 at the end of this year and 1.20 by the end of 2026.

Morgan Stanley expects stronger EUR/USD gains to 1.25 by the second quarter of 2026.

The dollar was subjected to renewed selling during the week with the currency index sliding to the lowest level since February 2022. In this environment, EUR/USD surged to 43-month highs above 1.16.

The US currency did secure a reprieve late in the week as risk appetite dipped and oil prices surged after Israel attacked Iran’s nuclear facilities. EUR/USD retreated to near 1.15, but with strong buying on dips.

ING expects caution will prevail initially; “The key difference from previous Israel-Iran standoffs is that nuclear facilities have now been targeted, and while oil production does not seem to be affected just yet, markets have to add in a bigger risk premium given the crucial role of Iran in global oil supply.”

The latest US inflation data was weaker than expected with core consumer prices increasing 0.1% in May with the year-on-year increase held at 2.8%.

Markets remain confident that the Federal Reserve will not cut interest rates at this week’s meeting, but with greater confidence in significant cuts later in the year.

According to Commerzbank; “While it is unlikely that Trump will dismiss Fed Chair Powell before the end of his term, he may nominate a Fed chairman more in line with his views next year.”

Markets are still fretting over the impact of tariffs and tensions will increase during the reminder of June.

Aviva Investors senior economist Vasileios Gkionakis noted the structural concerns as investors fret about persistent fiscal deficits, weakening foreign demand for government debt, and institutional uncertainty.

He added; “The US has been enjoying a significant privilege for decades. This is now shifting, with the US likely to run large fiscal deficits for years and against a backdrop of an extended net international investment position.”

ABN looked at multiple risks contained in the proposed Budget Bill.

According to the bank; “The overall impact on the economy would not be favorable, and the repercussions for financial markets could be significantly worse. This reputational damage has arguably been a major factor driving the dollar’s devaluation in recent months.”

Morgan Stanley commented; “We think that this weakening trend continues, and we now forecast the DXY to fall an additional 9% over the next 12 months to 91, with USD weakness most pronounced against its safe-haven peers – EUR, JPY, and CHF.”

Investment banks also see scope for further inflows into the Euro area.

BNP Paribas has calculated that if Dutch and Danish pension funds reduce dollar exposure to 2015 levels as a share of total assets under management, they have a further $217 billion to sell.

HSBC added; “Dutch pension funds are the largest in the EU and their investment behaviour often indicates broader European investment flows. If European investors continue to increase FX hedge ratios, it will likely provide further support to EUR-USD.”

BNP also agrees that ECB policy is close to turning and is positive on the Euro; “Our analysis suggests there is much more still to come.” It maintains a EUR/USD target of $1.20.

Commerzbank noted; “our economists expect the German fiscal package to provide a significant boost in the coming year. After many years of struggling, this should encourage investors to take a closer look at the euro area again, which should benefit the euro.”

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TAGS: Currency Predictions Euro Dollar Forecasts

I wrote on 8^th June that the best trades for the week would be:

1. Long of the GBP/USD currency pair after a daily (New York) close above $1.3616. This did not set up.
2. Long of Silver in USD terms. This closed 0.78% higher over the week.
3. Long of the S&P 500 Index pair after a daily (New York) close above 6,142. This did not set up.

The overall win of 0.78% equals a loss of 0.26% per asset.

Last week was basically mildly risk-on, with stock markets rising and the US Dollar falling on more positive than expected US inflation, PPI and consumer sentiment data. However, all that changed in the early hours of Friday in the Middle East as news broke of a very strong Israeli strike on Iran’s key military figures and its nuclear materials and scientists. This sent markets into a risk-off direction.

The Israeli strike has led to what could be described as all-out war between Israel and Iran, with Iran firing powerful ballistic missiles at Israeli population centers, and Israel in turn hitting hard at the military, the nuclear program, and increasingly at Iranian oil facilities.

This war has been long awaited, and it seems clear that the Israeli attack was acquiesced in by the Americans, who so far at least are not helping with offensive actions, although they are likely assisting in Israel’s strong antimissile defense, which is continuing to intercept over 90% of projectiles. However, the missiles which get through cause serious damage and fatalities, although at a level the Israeli public can probably accept, at least for a few more days or weeks.

It seems clear that the Iranian regime and nuclear program is in serious jeopardy, the nuclear program more so, and Iran has a limited supply of perhaps 2,000 ballistic missiles that it may not be able to replenish. The big question is whether the Americans will join in the drive to destroy Iran’s nuclear program, or whether Iran might sue for a negotiated settlement that would be acceptable to the USA.

The progress of the resolution of these questions is likely to be the major factor influencing markets over the coming week, but there are also major central bank meetings that could impact several G7 currencies.

Last week’s most important data releases were:

1. US CPI (inflation) – this was lower than expected, with annualized CPI expected to rise from 2.3% to 2.5%, but rising to only 2.4%.
2. US PPI – this key inflation metric was expected to rise by 0.2% month-on-month, but increased by only 0.1%, reinforcing the relatively low CPI data.
3. US Preliminary UoM Consumer Sentiment – this was far better than expected, suggesting surprising consumer resilience.
4. UK GDP – lower than expected, declining by 0.3% month-on-month, while a decline of only 0.1% was expected. This will raise recession fears for the UK, with the Bank of England facing a tough challenge as it will struggle to cut its relatively high interest rate while the high inflation rate persists.
5. US Unemployment Claims – as expected.

The coming week has some very high-impact data releases, including policy meetings at four major central banks, which can significantly affect the Forex market.

This week’s important data points, in order of likely importance, are:

1. US Federal Reserve Policy Meeting
2. Bank of Japan Policy Meeting
3. Bank of England Policy Meeting
4. Swiss National Bank Policy Meeting
5. US Retail Sales
6. UK CPI (inflation)
7. New Zealand GDP
8. UK Retail Sales
9. UK Unemployment Claims
10. Australia Unemployment Rate

The most impactful events on the Forex market will likely be the top five items.

The comments from the central banks will be closely watched, and the only rate change that is widely expected to happen will be at the SNB, which is likely to be cut by 0.25%.

Thursday is a public holiday in the USA and New Zealand.

For the month of June 2025, I forecasted that the EUR/USD currency pair would increase in value. The performance of this forecast so far is:

As there were no unusually large price movements in Forex currency crosses over the past week, I make no weekly forecast.

The Euro was the strongest major currency last week, while the US Dollar was the weakest. Volatility increased last week, with 26% of the most important Forex currency pairs and crosses changing in value by more than 1%. Next week’s volatility is likely to be higher as we will get several major central bank policy releases.

You can trade these forecasts in a real or demo Forex brokerage account.

Last week, the US Dollar Index printed a bearish candlestick which made the lowest weekly close since February 2022. There is clearly a long-term bearish trend in the US Dollar. Bulls have two reasons to hope for higher prices though:

1. The support level at 97.67, which is continuing to hold so far.
2. The outbreak of full-scale war between Israel and Iran early on Friday which triggered a run into safe havens, which to some extent still includes the US Dollar, although increasingly precious metals and some other currencies are taking on that role.

I think it makes sense to be trading in line with the long-term trend which will be short of the greenback, but only after the price has either got established below the support level at 97.67, or alternatively if the price is rejecting a key resistance level above, but the latter scenario is extremely unlikely to play out this week.

The EUR/USD currency pair reached a new 3.5 year high last week, well above the big round number at $1.1500, before giving back some gains on Friday as news emerged of the outbreak of war between Israel and Iran. The Euro was the strongest major currency last week while the US Dollar was the weakest.

A minor factor against bulls is that the resistance level at $1.1569 has continued to hold.

It seems unlikely that even if the war escalates, that the US Dollar will gain strongly, so I have faith in the long-term bullish trend here. This currency pair has an excellent record of respecting the long-term trend, so I am happy to be long here over the coming week.

Gold in US Dollar terms made its highest ever daily close last Friday, but only by a very small amount. This is basically bullish, but looking at the daily chart below, you could say that the price action is only testing a triple top.

The primary precious metal got a boost Friday from the outbreak of war between Israel and Iran, which triggered a flight into safe havens, although not an especially strong one.

It seems unlikely that the war will end any time soon, and there has been a strongly bullish long-term trend for a long time, so being long of Gold over this week will probably be a good bet.

More cautious traders might want to wait for another bullish breakout, maybe even above the record high just below $3,500.

Silver in US Dollar terms again reached a new thirteen-year high last week, above $36 per ounce, but a look at the weekly candlestick shows that it is a doji, which typically signifies indecision. Nevertheless, there is a clearly strong bullish trend in precious metals generally, although silver was rising even before Gold made its major upwards movement.

I am not strongly optimistic that Silver will rise further this week, but it seems more likely to rise than fall.

More cautious traders might want to wait for a new long-term high to be reached, or at least a strong daily close, before entering a new long trade here.

Looking at the daily price chart for WTI Crude Oil below, a lot of interesting and bullish things can be seen:

1. The bullish double bottom at around $55.00.
2. The cup and handle chart pattern which followed the double bottom, or at least something very close to that pattern.
3. The accelerating bullish momentum of recent days.

Of course, crude oil got a major boost Friday as news emerged of what is frankly the outbreak of all-out war between Israel and Iran. This long-anticipated hot conflict outbreak has dramatically pushed up the price of crude oil, as can be seen in Friday’s candlestick. However, bulls might want to beware the large upper wick as crude oil gave up some of its gains later in the day.

There is despite the potential blow-off top another reason to be even more bullish: since markets closed Friday, Israel has begun hitting Iranian energy targets, trying to establish an equation between deliberate Iranian fire on Israeli population centers and the destruction of Iran’s oil production capability.

I think Crude Oil is likely to rise over the coming week, although if a diplomatic solution to the war is found soon – which seems very unlikely – the price would drop dramatically.

I prefer to wait for a new 6-month high close before going long of WTI Crude Oil, so I will only enter a new long trade after a daily close above $80.43.

I see the best trades this week as:

1. Long of the EUR/USD currency pair.
2. Long of Gold in USD terms.
3. Long of Silver in USD terms.
4. Long of WTI Crude Oil if there is a daily (New York) close above $80.43.

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The US dollar is sitting on a confluence of support that extends over a decade. It’s a must-see level that could affect the entire forex market in the weeks ahead.

Watch today’s video for all of the details, including how I’m trading the DXY, EURUSD, GBPUSD, USDJPY, and XAUUSD.

US Dollar Index (DXY) Forecast

The DXY broke down last week, finally offering a thorough retest of 97.70. In previous videos, I’ve discussed how the index didn’t quite test the level in April, which left it open as a potential target.

Buyers stepped in on Friday to close the intraweek gap at 98.58. The DXY retreated after the gap closed but remains above 97.70 as we enter next week.

Another critical factor for the US dollar is the ascending channel from 2011. Although it’s difficult to pinpoint the exact placement on the daily time frame, the 14-year channel support is near 97.70.

That makes the next few weeks critical for the DXY. We either get a significant macro bottom developing in the 97.70 region, or the USD is heading much lower this year.

As always, it’s essential not to get ahead of ourselves. Until the DXY can break its 2025 trend line resistance or break below its 97.70 support, the US dollar will remain range-bound.

EURUSD Forecast

EURUSD broke above key resistance at 1.1530 on Thursday, flipping the level to new support during Friday’s session.

As we’d expect, bulls stepped in to defend the area before the weekend. However, EURUSD faces its most significant test in weeks as the DXY bounces from the 97.70 region.

With that said, a EURUSD bearish reversal can only take place if the pair closes back below the 1.1530 region. It will also need to occur on higher time frames, such as the daily and weekly charts.

Keep in mind that the March trend line at 1.1440 is also incredibly significant. The euro bounced from this level several times in May and June, so it’s one to watch.

Key resistance is 1.1660, with 1.1530 as support. As mentioned above, if EURUSD loses the 1.1530 support level, it will open up downside targets, including 1.1440, and potentially lower.

GBPUSD Forecast

GBPUSD refuses to back down from 1.3630 despite showing a nearly identical pattern to the 2024 top.

As discussed in recent videos, the current (potential) rising wedge resembles the 2024 price action before GBPUSD topped out. The RSI is also showing early signs of bearish divergence.

Simultaneously, the DXY is testing the confluence of support I shared above.

But despite these bearish factors, GBPUSD hasn’t confirmed a breakdown. For that to occur, areas like 1.3530 will need to break, along with the more significant 1.3430 support level.

Until then, GBPUSD is range-bound between 1.3430 support and 1.3630 resistance.

USDJPY Forecast

I touched on USDJPY in last week’s forecast. And although the pair hasn’t done much to confirm my ideal setup, it also hasn’t invalidated it.

My ideal scenario for USDJPY starts with the Yen Basket we discussed last time. Currently, the chart is holding above its 2020 trend line support, but a weekly close below could introduce significant yen weakness.

At the same time, USDJPY has to claw its way back above 145.40 on the high time frames. If the two charts satisfy these requirements simultaneously, we should have a highly probable USDJPY long to work with.

Until then, I’m not interested in USDJPY, given the choppiness since May.

XAUUSD (Gold) Forecast

Gold broke out from a bull flag on June 2nd and tested prior resistance as new support on the 9th. That retest triggered last week’s rally, which fell just short of breaking the $3,430 resistance area.

If gold bulls can break $3,430 next week, the next stop could be an all-time high above $3,500. XAUUSD is clearly benefiting from the multitude of global risks and uncertainties.

Above $3,500 it’s anyone’s guess, as gold will once again enter price discovery. However, as $3,500 became a factor, I’d be willing to bet that $4,000 would become a target and potential resistance if visited.