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Dollar Strength Keeps EURUSD Below 1.17, Silver Slides Below 50

EURUSD, Silver Outlook: With U.S. economic reports off the calendar, the U.S. Dollar Index (DXY) continues to hold firm, pressuring major currencies near key levels. Meanwhile, safe-haven assets such as gold and silver are showing signs of momentum weakness, with gold dropping below 4,300 and silver eyeing the 50 mark.

Razan Hilal
Razan Hilal

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Dollar Strength Keeps EURUSD Below 1.17, Silver Slides Below 50

Key Events

  • Long lines behind jewelry stores — contrarian or bullish signal?
  • Precious metals momentum takes a step back as gold falls below 4,300 and silver nears 50.
  • EURUSD remains pressured by the Dollar’s rebound below the 1.17 mark.
  • Flash manufacturing and services PMIs on Thursday could trigger volatility in euro pairs.

 

Long Lines Behind Jewelry Stores — Contrarian or Bullish Indicator?

From a Dow Theory perspective, when an asset dominates headlines and public attention, contrarian signals often begin to emerge — especially when momentum reaches extreme levels.

Currently, this setup aligns with the heated momentum in precious metals, alongside uncertainty stemming from the U.S. government shutdown and the absence of economic data.

The timing of any potential reversal remains unclear and likely depends on the resolution of the government shutdown, restored confidence in monetary policy, and trade negotiations.


However, the combination of record-high momentum readings and public demand spikes (e.g., crowds lining up to buy gold) serves as a warning that caution may be warranted near current price levels. Should prices close above 4,400, another rally could extend towards the 4,900-5,000 zone.

 

DXY Holds Bullish Rebound, but Faces Pullback Risks Below 99.50–100

The DXY continues to hold a bullish rebound from a 17-year trendline extending from the 2008 lows, maintaining its stance above the 96-support zone and pressuring global currencies.

DXY Outlook: Monthly Time Frame – Log Scale

image-20251021140904-1

Source: Tradingview

For EURUSD, the pair faces the risk of a break below 1.1520, which could open the door for another leg lower — particularly amid EU political instability.
So far, these key levels remain intact, keeping the outlook in a wait-and-see mode until a confirmed breakout occurs.

Technical Analysis: Quantifying Uncertainties

EURUSD Outlook: 3-Day Time Frame – Log Scale

image-20251021140904-2

Source: Tradingview

On the 3-day chart, EURUSD is struggling below the trendline connecting higher lows since April 2025, leaning toward a bearish bias.

  • A sustained move above 1.1700, 1.1780, and 1.1840 is required to revive the bullish trend, potentially targeting 1.2020 and 1.2300 — highs last seen in 2021.

EURUSD Outlook: Weekly Time Frame – Log Scale

image-20251021140904-3

 Source: Tradgingview

On the downside, continued dollar strength and a break below 1.1520 could expose the next support levels at 1.1460 and 1.1380.
A confirmed drop below these levels may extend losses toward 1.1200 and 1.1000, aligning with a previous resistance-turned-support zone respected between January 2023 and May 2025.

Silver Outlook: 3-Day Time Frame – Log Scale

image-20251021140904-4

Source: Tradingview

Silver has recharged its exhausted momentum below the 54 mark, corresponding to the 1.618 Fibonacci extension of the trend between the April 2025 low, July 2025 peak (39.50), and trough (36.20).

The price structure remains bearish, dominated by large-bodied candles, although haven flows could still counteract technical weakness.

  • Upside:
    A recovery above 54.40 could extend gains toward 56.30, aligning with the 1.786 Fibonacci extension.
  • Downside:
    Using the Fibonacci retracement tool to measure the uptrend from August to October 2025, prices are currently hovering near the 0.272 retracement level at 49.70.
    A daily close below 49.70 may extend the drop toward the 0.382 retracement at 47.00, consistent with a potential head-and-shoulders pattern forming on the 4-hour chart (shown below).

Silver Outlook: 4-Hour Time Frame – Log Scale

image-20251021140904-5

Source: Tradingview

Written by Razan Hilal, CMT

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