Nasdaq, EURUSD Analysis: Is the Bullish Scenario Still Intact?

Key Events

Nasdaq eyes a 1,000-point rally following the 20,760-breakout
EURUSD’s 2022 bull trend is at critical support levels
US CPI: key market catalyst for next week
Technical Analysis on DXY, EURUSD, Nasdaq

Nasdaq Outlook

Optimism surrounding the haven attributes of the tech sector alongside a Trump victory has boosted investor confidence in the Nasdaq, though inflation risks and the prospect of prolonged higher interest rates remain factors. With the latest breakout above the July high (20,760), Nasdaq is eyeing a potential 1,000-point rally toward 21,780.

EURUSD Outlook

The EURUSD experienced headwinds from a dollar rally post-election but managed to hold above the critical 1.0680 support following the Fed's rate cut. In a primary uptrend from the 2022 low (0.9530), EURUSD is currently in a consolidation phase. It now sits at a critical juncture, determining whether the uptrend will continue or reverse.

DXY Analysis: Monthly Time Frame

Source: Tradingview

On a monthly scale, the DXY remains on bullish ground. Time cycles show lows aligning with trend support dating back to 2008, while the RSI has rebounded from the neutral 50 zone. The latest consolidation’s lows align with the 0.610 Fibonacci retracement of the uptrend from May 2021 to September 2022.

A breakout above 106 could reinforce a long-term bearish scenario for EURUSD and US indices due to inflation concerns, whereas a sustained downtrend and dip below the July 2023 lows would support the longer term EURUSD uptrend.

EURUSD Analysis: Weekly Time Frame - Log Scale

Source: Tradingview

The EURUSD pair is reflecting volatility at a crucial point, where a bearish breakout below the 1.0660 level can extend the Euro’s drop towards 1.05 and possibly back towards 1.01.

On the upside, respecting the current triangle thrust and established uptrend since the lows of 2022, the EURUSD’ uptrend is expected to realign with resistance levels 1.10, 1.1140 and 1.1220 before extending a firm bull run above the 1.1320 and 1.15 levels.

Nasdaq Analysis: Weekly Time Frame – Log Scale

Source: Tradingview

Nasdaq’s significant 20,760 level has shifted to support, setting the stage for a potential 1,000-point rally towards 21,780. From an Elliott Wave perspective, the index is in the fifth wave of its primary uptrend established since October 2022 lows, with possible resistance around 21,300 before extending to 21,780.

On the downside, the primary uptrend’s parallel channel is positioned to support any pullbacks, with the main support level at 20,700, and an extended pullback can drop towards 20,400, 20,100, and 19,900-19,800 respectively, before confirming a longer-term bearish reversal for the index.

--- 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.