Weekly Forex and Market Outlook: USD Trends, EUR/USD, Nasdaq Dynamics, and Cryptocurrency Analysis

Fundamental Backdrop and Market Sentiment

Last week’s trading strategy yielded mixed results. Here’s a recap of the top trades:

1. Long S&P 500 index above 7803: Did not materialize.

2. Short EUR/USD below 1.1358: Achieved a 0.78% return.

3. Long soybeans: Fell 3.11%.

4. Long Ethereum: Unchanged.

The strategy resulted in a net loss of 2.33%, averaging 0.58% per asset.

Key economic data from the past week:

1. US Core PCE Price Index – Rose 0.2% MoM vs. 0.3% expected. Dovish USD outlook.

2. US Average Hourly Earnings – Up 0.1% MoM vs. 0.3% expected. Dovish for USD.

3. US Final GDP – Expansions at 2.2% QoQ vs. 1.5% forecast. Moderately hawkish USD signal.

4. US Non-Farm Employment Change – Significantly weaker than expected. Dovish USD impact.

5. RBA Cash Rate & Statement – 0.25% hike but with dovish rhetoric. AUD-friendly outcome.

6. Australia CPI – Rose to 4.0% YoY vs. 4.1% projected. Slightly dovish for AUD.

7. US Unemployment Rate – Rose to 4.2% from 4.1%. Dovish USD implications.

The USD weakened as dovish US employment data eased Fed rate hike expectations. CME FedWatch pricing dropped from 64.2% to 17–23% post-payrolls, with futures implying only 0.22% additional tightening through 2026 vs. pre-jobs 0.255%.

US non-farm payrolls added just 29,000, far below the 90,000 consensus, with revisions and a 4.2% unemployment rate. Treasury yields declined, boosting equities, particularly tech and small-cap stocks. The USD lost ground as markets priced out imminent Fed tightening.

Early in the week, concerns over energy prices, global bond yields, and geopolitical tensions supported a hawkish USD bias. However, Friday relief emerged from Middle East supply recovery talks and European diesel reserve discussions, pushing WTI ($89.43) and Brent ($99.45) lower, easing inflation fears and aiding risk assets.

Moving forward, markets favor a softer USD narrative, though oil and geopolitical shifts could rapidly recalibrate. The USD may enter a downward phase, while risk assets gain traction.

The Week Ahead: Key Data and Events

Next week’s critical releases include:

1. FOMC Meeting Minutes

2. BoJ Governor Ueda Remarks

3. Canada Unemployment Rate and Employment Change

Note: Australia and China observe public holidays during this period.

Monthly Forex Forecast: October 2026 Overview

No forecast for September; the USD lacked a dominant trend. For October, EUR/USD is projected to decline.

Weekly Forecast 4th October 2026

Currency crosses showed limited volatility last week; no significant directional bias anticipated.

Volatility remains low, with 19% of currency pairs moving >1% weekly. Similar or reduced volatility expected next week.

Technical Overview and Key Levels

Support and Resistance on Major FX Pairs

Key Support and Resistance Levels

US Dollar Index

The USD surged to an 18-month high, closing above 101.39, signaling bullish momentum. However, recent dovish US data (PCE, earnings) suggest a cooling economy and one more Fed hike may suffice by 2026.

Despite headwinds, the USD retained strength late in the week, indicating resilience. Technical indicators remain bullish, supported by elevated US Treasuries, including a 10-year yield above 5.20%.

Maintain a bullish bias cautiously; monitor for further dovish developments that could shift sentiment.

US Dollar Index Weekly Price Chart

EUR/USD

The EUR/USD hit a 16-month low near 1.1200, driven by France’s fiscal worries and widened EUR/German bond spreads. ECB hike expectations also cooled.

The pair’s historical trend-following nature suggests caution: with a sequence of lower highs/lows, bearish sentiment holds. Trail stops for existing shorts using 3x ATR(100) from the weekly low.

EUR/USD Weekly Price Chart

NASDAQ 100 Index

Tech-led NASDAQ 100 rallied to short-term highs, outperforming the broader S&P 500. AI valuations drive momentum, though sustainability risks loom as revenue lags pricing.

Despite bearish analyst views, charts remain bullish. Maintain a long position but limit exposure; easing Fed policy supports equities.

NASDAQ 100 Weekly Price Chart

WTI Crude Oil

WTI held support at $87.68, with an ascending channel intact, pointing to upward momentum. Geopolitical risks in the Persian Gulf remain key drivers.

Monitor for military developments; $100+ could trigger US interventions to ease prices. Longer-term traders may seek dips if Middle East tensions reignite post-midterms.

WTI Crude Oil Spot Daily Price Chart

Ethereum

Ethereum consolidates, showcasing tight ranges with potential for breakout. Technicals show resistance-turned-support confirmation.

Enter longs on bullish closes above $2,800 (confluence of round number and prior high). Trail stops and maintain existing positions.

Ethereum Daily Price Chart

Bitcoin

Bitcoin mirrors Ethereum’s technical setup. Watch $78,293 as a key entry point for additive positions.

Bitcoin Daily Price Chart

Bottom Line

Key trades this week:

1. Long S&P 500 above 7803.

2. Long NASDAQ 100.

3. Short EUR/USD.

4. Long Bitcoin.

5. Long Ethereum.

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