DXY GBP/USD, USD/CAD Weekly Technical Outlook

Weekly Technical Trade Levels on DXY, GBP/USD & USD/CAD 

US Dollar Price Chart – USD 240min (DXY)

Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView

Note: The US Dollar Index has declined more than 1.4% off the yearly highs after a strong 4.4% rally from the September low. The pullback rebounded off monthly open support last week at 101.46 with the recovery now attempting to break above the median-line of the monthly pitchfork. Resistance is eyed at the 61.8% retracement of the October range at 102.37 with a breach / close above the year high-day close at 102.53 needed to fuel another run at the highs. Key resistance remains unchanged at the 2016 high-close (HC) and the 2020 swing high at 102.95/99.

A break below the October lows would threaten a larger correction within the yearly uptrend with subsequent support objectives seen at the 38.2% retracement of the August advance at 101.27 and the 50% retracement at 100.75.

Bottom line: The focus is on this recovery off the monthly low and whether the bulls can reassert control. From a trading standpoint, rallies would need to be limited to 102.52 IF price is heading for a deeper correction here with a close below 101.47 needed to fuel he next leg of the correction.

The U.S. dollar enters a pivotal week with the Federal Reserve decision on Wednesday at the center of the calendar. Markets are heavily positioned for a hold, with current pricing implying roughly a 90% probability that the Fed leaves rates at 3.75%–4.00%. The focus will be on Chair Kevin Warsh’s guidance and whether policymakers keep the door open to another hike in December, with third-quarter GDP and September PCE inflation due Thursday to shape that outlook further. A hawkish Fed message or firm inflation data would reinforce the dollar’s near-term support, while a softer policy signal could leave the recent advance vulnerable to a deeper pullback.

British Pound Price Chart – GBP/USD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView

Notes: Sterling has rallied more than 2.1% off the monthly lows with the rally exhausting into resistance last week at the 50% retracement of the August decline at 1.3406. Price slipped below the median-line into the Sunday open with the bears attempting to break the 23.6% retracement of the monthly range today at 1.3353- watch the daily close with respect to this level.

Support rests at the May low which converges on the 25% parallel near 1.33 over the next few days. Broader bullish invalidation now rests at the 61.8% retracement at 1.3245 and a break / daily close below this zone would be needed to fuel another run at the lows with critical support unchanged at 1.3194.

A topside breach above 1.3406 is needed to mark uptrend resumption with subsequent resistance objectives eyed at the 200-day moving average (currently near ~1.3433) and the February low-day close (LDC) / 2026 yearly open at 1.3465/74- look for a larger rection there IF reached for guidance. The next major technical considerations are eyed at the July high at 1.3558 and the 61.8% retracement at 1.3590.

Bottom line: Sterling is at risk for a deeper setback within the monthly uptrend heading into the start of the week. From a trading standpoint, losses should be limited to 1.33 IF price is heading higher on this stretch with a breach / daily close above 1.3406 needed to fuel the next leg of the advance. The U.K. Budget is due on Wednesday, but the Fed / PCE report will likely remain the primary catalysts this week.

Canadian Dollar Price Chart – USD/CAD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView

Technical Outlook: USD/CAD plunged more than 2.3% off the monthly highs with price unable to mark a daily close below the July low-day close last week. I adjusted this slope after today’s webinar, but the lateral levels remain unchanged. Initial resistance is eyed at the 38.2% retracement of the August advance at 1.4083 with near-term bearish invalidation at the November highs at 1.4141. This level converges on the upper parallel later this week and strength surpassing this slope would be needed to suggest a more significant low is in place, and a larger reversal is underway.  

Weekly open support converges on the July low-day close (LDC) at 1.4011/12 with key support steady at 1.3942/49- a region defined by the 2025 September high-day close (HDC) / October low-day close (LDC) and the 61.8% retracement. Note that the 25% parallel converges on this level over the next few days and a break / close below would be needed to fuel the next major leg of the decline. Subsequent support rests with the 200-day moving average and the 78.6% retracement at 1.3854.

Bottom line: USD/CAD is rebounding ahead of major event risk this week with the Bank of Canada & Federal Reserve rate decisions on tap Wednesday and the US inflation report on Thursday. From a trading standpoint, rallies would need to be limited to 1.4083 IF price is heading lower on this stretch – look for a larger reaction on a test of 1.3942/49 IF reached with a close below this pivot zone needed to mark resumption of the October downtrend.

Economic Calendar – Key Data Releases

 

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex