Can the US dollar break key resistance next week, and how might markets react to the November 5th US presidential election?

Watch today’s forex forecast video for all of the details, including how I’m trading the DXY, EURUSD, GBPUSD, USDJPY, and USDCAD next week.

US Dollar Index (DXY) Forecast

The DXY remains below its 104.50 resistance level, but is showing considerable strength today following a dismal US jobs number.

However, the US dollar needs to get above 104.50 on the higher time frames to signal a continuation toward levels like 106.00.

Until then, dollar bulls need to be careful, as the potential for a pullback remains.

I’ve mentioned for weeks that I expect any pullbacks from the DXY to be relatively shallow.

But with the upcoming US presidential election next week, traders should brace for volatility from the US dollar and markets at large.

EURUSD Forecast

EURUSD worked out beautifully for us today on the latest non-farm payroll (NFP) numbers.

If you saw Thursday’s EURUSD video, you know I was watching for a short on a sweep of the 1.0880 high and a 1.0900 retest.

Today’s high for the euro is 1.0906, just six pips above my ideal entry.

Not only that, but the pair is down over 50 pips since that retest, and is on track to carve a potential bearish engulfing day.

However, traders should know that 1.0840 is likely to attract buyers next week.

So, unless the EURUSD can close below 1.0840 today, we could see a bounce from that region next week.

That makes sense when you consider that the DXY is below 104.50 resistance.

But as I discussed throughout October, I do not favor US dollar shorts following the 102.00 and 102.60 reclaims.

In my opinion, that’s probably enough to keep the USD bullish through the rest of 2024.

We will see pullbacks from the DXY, but I’d rather be a US dollar buyer on those pullbacks than try to short an aggressive dollar uptrend.

GBPUSD Forecast

GBPUSD has looked increasingly weak against the US dollar and its euro counterpart.

The pair retested 1.3050 again this week, which triggered a 150-pip drop back to our 1.2900 support level.

So far, this is still the trading range for GBPUSD.

However, with next week’s US presidential election, we have to entertain the possibility of a breakout from this range.

Note that “breakout” can refer to bullish and bearish moves.

A sustained break above 1.3050 on the daily time frame would expose recent highs near 1.3100 and 1.3175, while a daily close below 1.2850 would open up 1.2700.

USDJPY Forecast

In my latest USDJPY video, I discussed the potential for a bullish reclaim of the 151.00-152.00 region and what that could mean for the pair.

So far, we’ve seen USDJPY bulls reclaim that area on the high time frames, and defend it as new support on Friday.

If this continues through next week’s US election, we could see USDJPY target 155.60 and even 160.00.

That said, remember that the DXY needs to take out 104.50 resistance for the US dollar to strengthen across the board.

Until then, bulls should tread carefully.

USDCAD Forecast

USDCAD is working on its sixth daily close above a multi-year resistance.

It’s also a second higher weekly close above the 1.3880 level, which dates back to October 2022.

If USDCAD can hold this breakout through next week’s US presidential election, it could send the pair significantly higher toward 1.4200 and 1.4700.

As always, be careful with the upcoming volatility, and remember that even the strongest uptrends have pullbacks.