GBPUSD Forecast
GBPUSD broke down last week, sending the pair toward its sell-side imbalances at 1.3509 and 1.3452. The pound tagged the first single print on Friday, but the second remains open for business.
In last weekend’s Weekly Forex Forecast, I noted how the pair was pressuring 1.3630. I even stated that a breakdown seemed likely, given the “heavy” price action in the region.
GBPUSD broke 1.3630 on Monday and retested the level as new resistance on Tuesday. That offered traders an excellent short opportunity toward those imbalances.
Where GBPUSD goes in the week ahead hinges on what happens with the DXY at 97.70. The same goes for EURUSD. Much of the forex market is awaiting a resolution to the DXY stalemate from last week.
Key support for GBPUSD is near the second imbalance at 1.3450. That’s the pair’s ascending trend line from the 2025 low. Key resistance remains the 1.3630 region.
USDCAD Forecast
USDCAD is one for your watchlist next week. Although buyers have work to do, the potential W-bottom is interesting for a few reasons.
First, the early-stage formation is well-defined. Second, the DXY continues to pressure 97.70, suggesting a bullish break. And third, there’s a buy-side single print at 1.3914.
The single print, or imbalance, at 1.3914 seems trivial until you realize that it’s the exact projected target of the W-pattern. That may be coincidental, but in my experience, it’s usually a clue about a market’s next move.
USDCAD must overcome the 1.3740 resistance area on the daily chart to confirm a breakout. There’s also an imbalance at 1.3620 that could become a factor next week. However, whether that’s a clue also depends on what the DXY does at 97.70.
XAUUSD (Gold) Forecast
Gold rallied from its short-term channel support last week near $3,290. I mentioned this as a key support for XAUUSD in the previous week’s video. I also talked about the $3,318 imbalance that could serve as a target.
That idea played out nicely. However, resistance at $3,322 didn’t hold. I alerted VIP members to this as gold was breaking above it on Thursday, noting that $3,369 could be next. Friday’s session is sitting less than $20 from that level.
I mentioned $3,369 as a target to VIP members, as it’s an unfilled gap from June. The June 24th candle opened with a gap down, and the early July rally fell short of closing the gap by a mere $2.
Nonetheless, open gaps like $3,369 usually get filled. That’s especially true in ranging markets, which describes the XAUUSD price action since April.
Sellers will likely defend the $3,369 area if gold tests it in the coming hours. Whether they succeed could depend on what we get from the DXY next week. Gold is moving with the US dollar on Friday. Still, the inverse relationship will eventually prevail as it has for decades.