EUR/USD, DXY, Silver Price Outlook: Bullish Rebounds on Hold?

Bullish rebounds across currency markets, including EUR/USD, precious metals and risk assets, may be temporarily on hold following the stronger-than-expected U.S. CPI data and continued attacks on oil tankers in the Strait of Hormuz. This backdrop is supporting the U.S. Dollar Index and crude oil charts, potentially delaying those rebounds.

December Rate-Hike Expectations

Source: CME FedWatch Tool

The probability of a December Fed rate hike has risen to nearly 100%, with markets pricing in an approximately 86% chance of a 25-basis-point increase and a 13% chance of a 50-basis-point increase. These expectations, alongside persistent geopolitical tensions, have supported the bullish setup in the DXY following the sharp volatility around the U.S. midterm election results and the Democratic victory.

DXY Price Outlook: Weekly Time Frame – Log Scale

 

Source: TradingView

Despite briefly breaking below its 10-month rising support to test the 101 level, the DXY has climbed back above the trendline and the 102 mark, reinforcing its near-term bullish bias.

From an Elliott Wave and momentum perspective, the DXY may be tracing its fifth and final wave of 2026. A close above 102.60 would bring the eight-month rising resistance near 103–103.50 into focus. This could be a final test before either a pullback or a longer-term bullish breakout.

On the downside, a sustained break below 101 would bring 100.60 and the psychological 100 level into focus. These levels align with the 50% and 61.8% Fibonacci retracements of the September–November advance. A confirmed break lower could signal a longer-term bearish shift in the DXY, supporting rebounds across major currencies and precious metals.

EUR/USD Price Outlook: Weekly Time Frame – Log Scale

 

Source: TradingView

The DXY’s strength is limiting EUR/USD’s rebound potential, keeping the pair below a multi-month descending trendline drawn from August 2025. This trendline has acted as resistance since October, near 1.1260.

A close above 1.1260 would bring bullish reversal risks into focus. This scenario aligns with weekly RSI testing oversold conditions last seen in 2025 and daily RSI rebounding from oversold conditions last seen in 2015. The 1.1320–1.1420 resistance zone would then become the next area to watch for confirmation.

On the downside, the 2026 decline in EUR/USD may represent a three-leg corrective pattern. Using the January, July and August 2026 extremes, the pair is currently testing the 78.6% Fibonacci extension near support at 1.11.

If EUR/USD breaks below 1.11, the 100% extension near 1.10–1.0930 would come into focus. This historical confluence zone could mark either another long-term dip-buying opportunity or a continuation of the euro’s decline within the descending parallel channel in place from 2008 to 2025.

Silver Price Outlook: Weekly Time Frame – Log Scale

 

Source: TradingView

Bullish rebounds in silver and gold are moving in tandem with U.S. indices, despite a lack of confirmation from headlines. This may indicate that markets are pricing in a potential de-escalation. A possible 25-basis-point rate hike remains a near-term hurdle, while a sustained bearish shift in crude oil would add technical support to the de-escalation scenario.

Silver’s rebound from the 48.60–49 support zone may mark a longer-term base. This area aligns with:

• Multi-month descending support in place since February 2026
• Multi-decade resistance turned support, spanning levels from 1980, 2011 and 2025
• Daily oversold momentum last seen in 2022

If this support zone gives way, the next key support is near 45, aligning with the October 2025 support. This level is comparable to gold’s recent rebound from 3,870.

On the upside, a potential inverse head-and-shoulders pattern is forming. A breakout above 54.80 could expose 57 and then the psychological 60 level, where silver would test seven-month descending resistance. A rejection there could renew bearish pressure, while a sustained breakout would strengthen the case for a longer-term bullish shift.

Oversold readings in silver and Nvidia, at levels last seen in 2022, may point to longer-term bullish setups following this year’s steep sell-offs.

Written by Razan Hilal, CMT
Follow on X: @Rh_waves