Key Events
- Fed rate-hold expectations, in line with improving U.S. economic reports, lift market appetite ahead of mega-cap earnings on Wednesday night
- India and the EU move forward with trade deal announcements as a hedge against Trump tariff risks
- EURUSD breaks through the 2025 high at 1.1920, while Nasdaq challenges the 25,900 mark
EU and India continue to move toward trade agreements, hedging Trump tariff risks and supporting EURUSD above the 1.19 mark. Meanwhile, U.S. indices and the U.S. dollar brace for tomorrow’s FOMC meeting amid Fed independence concerns, tariff risks, and upcoming mega-cap earnings results.
While risk-on sentiment rises, macro defensiveness can still be seen, with precious metals holding at elevated levels above 100 and 5,000, the DXY pressured near the 96 level and its 17-year support, and Bitcoin remaining below the 87,000 mark, reinforcing defensiveness across recent session rallies.
The Fed is expected to hold rates at 3.75%, in line with improving economic metrics, including stronger growth and easing inflation pressures—a bullish factor supporting U.S. indices toward the upside. Volatility risks remain elevated in both directions following earnings from Tesla, Microsoft, and Meta on Wednesday after the U.S. close, with potential ripple effects into Thursday’s session open, followed by Apple reporting after Thursday’s U.S. close.
EURUSD Outlook: 2 Week Time Frame – Log Scale
Source: Trading view
In line with headline-driven turbulence, EURUSD trades beyond the consolidation range that has been in place since June 2025, breaking above the 1.1920 mark. Recent developments have reinforced this bullish breakout.
The scenarios are as follows:
A sustained hold above 1.1920 would confirm a bullish continuation path, bringing key resistance levels and historical highs from 2021, 2020, and 2018 into focus at the 1.23 and 1.25 areas.
On the downside, should the U.S. dollar regain strength above the 97 mark, EURUSD is expected to rotate back into consolidation, facing key support levels at 1.1580 and 1.1480. A break below these levels would open the way for drawdowns toward the 1.12 and 1.11 marks, offering potential dip-buying opportunities.
Nasdaq Outlook: 3-Day Time Frame – Log Scale
Source: Trading view
From a 3-day time-frame perspective, Nasdaq is challenging the 25,900 resistance level after reclaiming the 25,500 mark. This zone remains pivotal and could open the path toward 26,300, reinforcing bullish bias and redirecting gains toward the 27,000 threshold.
On the downside, should losses resume and prices close back below the 25,500, 25,200, and 24,900 support zones, a steeper corrective structure would be confirmed. A break below these levels exposes 24,600, followed by deeper downside risk toward 24,300, 23,900, and 23,400, where dip-buying interest may re-emerge in line with the broader uptrend.
The 23,400 level aligns with the 100% extension measured from the 26,300 high, the 23,900 November low, and the 25,800 January 2026 high. In more extreme scenarios, the 1.272 extension comes into focus near the 22,900 mark.
Bearish risks remain correlated with the Dow Jones monthly chart, where an extended consolidation since the 2020 rebound continues to raise the risk of a broader corrective structure before longer-term uptrends resume.
Written by Razan Hilal, CMT
Follow on X: @rh_waves
