EUR/USD & Nasdaq Forecast: Breakout Scenarios Ahead

As markets digest softer US inflation data, stronger-than-expected corporate earnings, and renewed Middle East tensions, consolidations across major asset classes continue to develop, creating key technical scenarios to watch for the next directional breakout.

Markets remain caught between improving inflation data and rising geopolitical risks. US CPI eased from 4.2% to 3.5%, while US PPI fell to its lowest level since 2025 at -0.3%. At the same time, renewed tensions around the Strait of Hormuz continue to support crude oil prices near $80 while raising concerns over global shipping conditions heading into the second half of the year. Transit risks and shipping costs through Hormuz remain elevated, with volumes yet to return to full capacity, delaying a broader recovery across global supply chains, energy markets, and commercial activity.

Although ASML reported stronger-than-expected earnings, reinforcing the resilience of AI-related investment, the Nasdaq continues to trade within a one-and-a-half-month consolidation that has recently begun to lean modestly to the downside. As the well-known technical analysis principle suggests, the longer a consolidation persists, the more significant the eventual breakout is likely to be. This continues to highlight the importance of the Nasdaq's current technical setup, which I discussed in my latest webinar and illustrate in the chart below.

             

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In the currency markets, the US Dollar Index (DXY) has begun unwinding part of its recent bullish momentum following the larger-than-expected decline in US inflation. This has allowed major currency pairs to recover, although only toward key resistance levels. EUR/USD, for example, continues to struggle near the 1.1480 resistance while the DXY tests the critical 100.30 support level, which aligns with the golden Fibonacci retracement of the June 15-June 25 advance.

EUR/USD Forecast: Weekly Time Frame – Log Scale

 

Source: TradingView

EUR/USD continues to trade below the 27.2% Fibonacci retracement of the April-June decline near 1.1480, after rebounding from the descending trendline connecting lower lows since August 2025, while the DXY continues to hold above the 100.30 support.

Bullish scenario (likely to remain limited while weekly momentum retests the neutral 50 level from below)

A breakout above 1.1480, corresponding to the 27.2% Fibonacci retracement, would expose the following upside targets:

• 1.1530 – 38.2% Fibonacci retracement.
• 1.1590 – 50% Fibonacci retracement.
• 1.1650 – 61.8% Fibonacci retracement, representing a high-probability pullback zone. A sustained break above this level would significantly increase confidence in a broader bullish continuation toward the 1.1800 region.

Bearish scenario

A breakdown below the 1.1300-1.1280 support zone would confirm a decisive break below the August 2025-July 2026 consolidation range, exposing the pair to:

• 1.1180.
• 1.1070, corresponding to the May 2025 low and the upper boundary of the well-respected 2008-2025 channel.

Nasdaq Forecast: Daily Time Frame – Log Scale

 

Source: TradingView

Despite ASML's earnings beat, the Nasdaq continues to consolidate with a neutral-to-bearish bias as valuation concerns persist within a higher-for-longer interest rate environment.

The longer this consolidation continues, the greater the probability of a significant breakout. Based on the current structure, the measured move suggests a potential range of approximately 1,000-2,000 points in either direction, depending on confirmation from both price action and the RSI trend.

Bullish breakout scenario

A breakout above the descending resistance connecting the lower highs since June 22, beginning with a move above 28,900, would expose:

• 30,100.
• 30,400.
• 30,600.

These levels will determine whether the index experiences another major pullback or confirms a bullish breakout toward:

• 31,700.
• 32,700.

These upside objectives align with the Fibonacci extension levels of the broader trend spanning 2024-2026.

Bearish breakout scenario

A breakdown below the 28,800-28,600 support zone, which aligns with the 27.2% Fibonacci retracement of the March-June advance, would expose:

• 27,700 – 38.2% Fibonacci retracement.
• 26,700 – 50% Fibonacci retracement.

This area represents a high-probability rebound zone, particularly if accompanied by oversold momentum conditions similar to those recorded near the yearly lows.

Key Takeaway

The evolving shipping landscape, including transit tolls, freight insurance costs, and war-related risks around the Strait of Hormuz, has yet to be fully reflected in market pricing. As a result, a cautious outlook remains appropriate until greater clarity emerges regarding regional stability.

The two key charts to monitor for early signals of a broader market shift remain crude oil and the US Dollar Index, as both continue to drive intermarket relationships across currencies, equities, commodities, and broader risk sentiment.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves