EURUSD, Nasdaq Outlook: EURUSD Faces Parity Risk and Nasdaq Eyes another Bull Run

Key Events

• DXY Risks: A move above 107 could push the euro closer to parity with the dollar.

• NVDIA Earnings: Driving optimism for a long bull run on Nasdaq.

Week Ahead

• EURUSD Volatility: German Prelim CPI (Thursday) and EUR Flash CPI (Friday).

• US Economic Data: Core PCE, FOMC Minutes, Durable Goods Orders, and prelim GDP on Wednesday.

DXY Chart: Monthly Time Frame - Log Scale

Source: Tradingview

The DXY is poised for a sharp rally in 2025 after breaking out from a year-long consolidation since December 2023 lows. This uptrend signals downside risks for EURUSD, potentially pushing the euro toward parity with the dollar.

Resistance remains at the October 2023 high (107.40), with further levels at 110 and 112.70 if the rally extends.

EURUSD Chart: Monthly Time Frame - Log Scale

Source: Tradingview

The bullish outlook for EURUSD has faded after the pair's sharp drop from the boundary of its long-term channel, extending back to the 2008 highs and connecting peaks from 2011, 2014, and 2021. The euro is now eyeing the mid-channel, aligning with parity to the dollar and potentially targeting 0.98 on the downside.

Support levels stand at 1.0430, 1.0380, and 1.0160. For a reversal, the EURUSD must break decisively above 1.06, opening the door to levels 1.07 and 1.0770.

Nasdaq Analysis: Weekly timeframe – Log Scale

Source: Tradingview

Nasdaq's recent support at the 20,200 level, aligning with the October open and close levels of the weekly candles, is providing a foundation for another potential bull run. Resistance levels at 20,800 and 21,100 are in focus, with a possible rally extending to 21,700. On the downside, support levels at 19,900 and 19,600 could come into play if the index dips below 20,200.