EURUSD, Nasdaq Forecast: Inflation Data and Holiday Volatility

Article By: ,  Market Analyst

Key Events

  • German Prelim CPI
  • Eurozone CPI
  • Santa Rally or Pause Before New Year?

Eurozone Inflation and Upcoming US Data With the euro trading at extreme lows, German prelim CPI, set for release today, is expected to drive volatility while the US Dollar remains on holiday due to Thanksgiving. As the euro trades near critical levels before the weekly and monthly close, its response to upcoming German and Eurozone inflation data will likely shape its December trajectory.

Next week, volatility risks remain high with key US economic data, including non-farm payrolls, ISM Services PMI, and ISM Manufacturing PMI, potentially shifting focus away from the "Trump effect." While Fed rate impacts have taken a back seat due to Trump's market influence, upcoming payroll data and rate anticipations—combined with seasonal holiday effects—could further stir volatility between Christmas and New Year.

Technical Analysis: Quantifying Uncertainties

EURUSD Forecast: 3Day Time Frame – Log Scale

Source: Tradingview

Between a potential bullish engulfing pattern on the weekly time frame, and a dragonfly doji on the 3-day time frame, aligning with oversold relative strength levels previously seen in October 2023, the EURUSD chart leans towards a bullish bias. Two scenarios are set ahead of the German CPI today and the Eurozone CPI on Friday

Bullish Scenario: the continuation of the rebound from the 1.0333 mark above 1.06 can reach the 1.07 and 1.0770 resistance levels respectively.

Bearish Scenario: a close below the 1.0333 mark can amplify parity risks with the dollar and further towards the 0.980 mark.

Nasdaq Forecast: Monthly Time Frame – Log Scale

Source: Tradingview

Analyzing the Nasdaq's monthly chart reveals that the so-called "Santa Claus rally" and subsequent New Year enthusiasm influenced market movements between 2022 and 2024. Currently, the Relative Strength Index (RSI) is approaching overbought levels last seen in 2021—a period when the holiday season marked a resistance for a year-long market correction. With Trump’s return to the White House in January 2025, extended bullish momentum could be possible, and key levels remain pivotal to quantifying the scenario.

Nasdaq Forecast: Weekly Time Frame – Log Scale

Source: Tradingview

The Nasdaq’s uptrend shows potential for further gains above the 20,200 level, which aligns with the key open and close levels of October trading weeks. A decisive break above 21,200 could extend the rally towards the 21,700-mark.

On the downside, a close below 20,200 may find support near the lower boundary of the primary uptrend channel at 19,900 and 19,600. Should the index breach the critical 19,200 level, it could open the path to further declines, targeting 18,700, 18,200, and potentially 17,000 in a bearish scenario.

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

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

© City Index 2024