Bearish pressures continue to build across currencies and precious metals as the US Dollar Index (DXY) approaches the critical 100.80 resistance zone. Gold is testing the key 4220 support area, while EURUSD faces growing downside risks toward 1.14.

Market expectations shifted in a more hawkish direction following Kevin Warsh's first FOMC meeting, highlighted by:

• A sharp upward revision in Core PCE inflation to 3.6%
• Headline inflation remaining above the 2% target at 4.2%
• A resilient labor market

As a result, September rate hike expectations have risen above 49%, according to CME FedWatch data. This has reinforced bullish momentum in the US dollar and brought DXY back to a major multi-year resistance zone that could determine the next directional move for currencies and precious metals.

A confirmed breakout above 100.80 could accelerate downside pressure on EURUSD and gold. Conversely, a rejection from this zone may allow both assets to stabilize after weeks of sustained selling pressure.

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EURUSD Price Forecast: Daily Time Frame – Log Scale

Source: TradingView

One-Year Consolidation Remains Intact

EURUSD continues to trade within a year-long consolidation range, with neither bulls nor bears managing a decisive breakout.

The broader outlook continues to be driven by US dollar strength, inflation trends, and diverging expectations between the Federal Reserve and the European Central Bank.

Long-Term Dip-Buying Zone Near 1.10?

Key support levels remain at:

• 1.1400
• 1.1320

These levels may continue to provide support within the year-long consolidation range.

However, a sustained breakdown below this zone would expose longer-term support levels and the 0.272 Fibonacci extension of the broader trend spanning the 2021 high, 2022 low, and 2026 high, near 1.10.

This level also aligns with the upper boundary of the long-term descending parallel channel that guided price action between 2008 and 2025.

This region could become an attractive long-term accumulation zone should broader macroeconomic conditions eventually shift in favor of a weaker US dollar cycle.

Failing that, EURUSD may extend losses toward 1.08 and 1.06 before another meaningful long-term buying opportunity emerges.

Short-Term Resistance Levels

The first resistance levels to monitor are located near previous swing highs at:

• 1.1500
• 1.1620
• 1.1680

These levels are likely to determine whether EURUSD can generate enough momentum to challenge the upper boundary of its broader consolidation structure.

Long-Term Resistance Targets

The 1.127 Fibonacci extension of the 2025–2026 cycle points toward major resistance zones at:

• 1.1850
• 1.1930

These levels could confirm a long-term bullish shift in the broader trend. A sustained breakout above these levels would expose the pair to 1.2100 - 1.2350 near the 2021 highs, followed by the 2018 highs near 1.2580.

Gold Price Forecast: Daily Time Frame – Log Scale

Source: TradingView

Gold Attempts to Reclaim 4370 Resistance

From a daily perspective, XAU/USD attempted to reclaim the 4370 resistance level but faced hawkish pressure from the Federal Reserve, redirecting the trend toward another potential pullback.

A successful breakout would have cleared the descending trendline connecting lower highs since March 2026, confirming a potential bullish shift in market structure.

For now, the rebound from the 4020 low remains on cautious footing.

Bullish Scenario: Daily Close Above 4370

61.8% Fibonacci Retracement of the May 29–June Low Decline

A sustained daily or weekly close above 4370, accompanied by daily momentum readings moving back above the neutral 50 level, would confirm a medium-term bullish continuation.

Key upside targets derived from the Fibonacci retracement of the May 29–June low decline stand at:

• 4470 (78.6%)
• 4590 (100%)

A breakout above the June highs and a sustained move beyond 4590 would begin to reaffirm the longer-term bullish outlook for gold.

Bearish Scenario: Close Below 4220

A close below 4220 would bring the yearly lows near:

• 4160
• 4080
• 4020

back into focus before determining whether gold can stage another bullish rebound or enter a deeper corrective phase toward:

• 3880 - the October 2025 low

For the six-month outlook on gold, refer to my previous article covering the broader long-term structure. DXY, Gold Price Forecast: Will Kevin Warsh's First FOMC Halt or Support Gold's Rebound?

DXY Remains the Key Driver

With DXY testing a critical multi-year barrier and rate hike expectations continuing to rise, EURUSD and gold remain vulnerable to further downside pressure.

Whether the dollar confirms a breakout above 100.80 may determine if current pullbacks evolve into broader bearish trends or remain part of longer-term consolidation structures.

For now, the balance of risks continues to favor the US dollar, keeping pressure on both currencies and precious metals until a clearer technical rejection emerges.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves