EURUSD, Nasdaq Outlook: FOMC, Earnings, and ECB Decision Risks

Article Outline

• Key Events: Deepseek, Mega Cap Earnings, FOMC, ECB Refinancing Rate, US Advance GDP, and German CPI
• Technical Analysis: EURUSD, Nasdaq (3-Day Time Frame)

Nasdaq’s 2025 Trend vs Mega Cap Earnings and FOMC Week Volatility Risks:

• Earnings Reports: Wednesday–Thursday
• FOMC Meeting: Wednesday
• US Advance GDP: Thursday
• US Core PCE: Friday

The Nasdaq has retreated to the lower boundaries of its primary uptrend on early Monday trading, sitting around the 21,000 range, as the FOMC and mega-cap earnings week begins. The catalyst behind the crash in US indices is the emergence of a Chinese rival to Open AI's Chat GPT, Deepseek. Nasdaq’s next steps following a nearly 1000-point plunge depends heavily on the FOMC's guidance and the outcomes of Q4 earnings. Microsoft, Meta, and Tesla are set to release their Q4 earnings on Wednesday, while Apple and Amazon are scheduled for Thursday.

Q4 earnings have been relatively positive, helping US indices edge closer to their December 2024 record highs. However, uncertainties remain due to shifting Trump-era policies, persistent inflation risks, and the FOMC’s unclear outlook. These factors, coupled with price action hesitation, have cast doubts on the likelihood of a decisive breakout. Detailed Nasdaq scenarios are analyzed below.

Euro’s Hesitant Rebound vs FOMC and ECB Week Volatility Risks

• FOMC Meeting: Wednesday
• ECB Refinancing Rate: Thursday
• German Prelim CPI: Friday
• US Core PCE: Friday

The EURUSD and DXY have been in a reversed pause from their November 2022 extremes. The Dollar Index (DXY) reached resistance at 110, while the Euro fell to support at 1.1070, before both reversed by nearly 3% to their current levels. The sustainability of these reversals is under scrutiny this week, with attention focused on Fed and ECB policies, as well as critical inflation data, including the German Prelim CPI and US Core PCE on Friday.

While economic calendar metrics are likely to influence market trends, Trump’s market-related comments and their impacts remain a significant risk factor for macro trends, driving sentiment largely through speculation. Detailed EURUSD scenarios are outlined in the charts below.

Technical Analysis: Quantifying Uncertainties

EURUSD Outlook: 3-Day Time Frame – Log Scale

Source: Tradingview

The Euro’s rebound has reached its first resistance at 1.0520, previously highlighted in EURUSD, USDCAD: Markets on Edge Ahead of Concrete Trump Policies. This level aligns with the mid-channel resistance zone of the July 2023–January 2025 trend. The Relative Strength Index (RSI) is also rebounding from its neutral 50 level.

A firm close above 1.0520, along with a breakout above the RSI’s 50-neutral zone, could pave the way for further gains toward 1.0620, 1.0700, and 1.0850.

Downside Risks:

This event-heavy week highlights key short-term support levels at 1.0430, 1.0370, and 1.0300. A break below these levels could drive EURUSD lower, targeting the 1.1070 support and potentially extending bearish scenarios toward parity (1.0000) and 0.98.

Nasdaq Outlook: 3-Day Time Frame – Log Scale

Source: Tradingview

The Nasdaq continues to hold within the boundaries of its primary uptrend, which has seen periods of volatility and rebounds. The trend is currently facing critical support levels at 21,200, 21,000, and 20,800, where support is expected to hold.

However, if the trend holds below the 20,800-mark, bearish scenarios could unfold, targeting levels at 20,200, 20,000, and 19,600.

On the upside, resistance levels at 21,700, 22,000, and 22,200 are key hurdles to challenging record highs. A firm close above the 22,200-mark could extend the Nasdaq’s uptrend, with potential gains toward the 22,800 level.

Written by Razan Hilal, CMT

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