Central Bank Week: EURUSD, NASDAQ, DAX & USDCAD at Decision Zones
With major central banks—including the Federal Reserve, European Central Bank, and Bank of Canada—set to release rate decisions, price action across key instruments is tightening into decision zones
The market is entering one of the most critical phases of the month.
With major central banks—including the Federal Reserve, European Central Bank, and Bank of Canada—set to release rate decisions, price action across key instruments is tightening into decision zones. At the same time, geopolitical tension and oil-driven inflation are still influencing sentiment, creating a high-volatility, headline-driven market.
Let’s break down what the charts are telling us.
💱 EURUSD — Momentum Fading Into Resistance (H4)
Price recently pushed higher but is now losing momentum as it flattens around the 21 EMA. The 50 SMA is starting to act as dynamic resistance. Structure shows lower highs forming.
Fundamental Backdrop
Euro recently gained on USD weakness tied to Iran developments. However, uncertainty remains ahead of central bank decisions. The European Central Bank is expected to hold rates tomorrow but remain cautious on inflation. The Federal Reserve is also forecasted to hold rates at 3.75%, with its statement expected around 7:30pm. This is likely the reason bearish pressure is building on the H4 timeframe.
What to watch:
Rejection at resistance → sell continuation. Break below structure → momentum move lower. Many traders will look to sell rallies into resistance zones, but best practice is to confirm with EMA crossover or rejection candles.
NASDAQ (US100) — Trend Strong, But Overextended
The US100 H4 chart suggests a strong bullish trend remains intact. Price is still trading above both the 21 EMA and 50 SMA, although momentum is slowing near highs. Tech stocks remain supported by liquidity expectations, but rate decisions could shift sentiment quickly. If rates stay high → tech gets pressured. If dovish tone appears → rally continues. As of now, US100 is bullish, but vulnerable. What to watch out for is simple: Pullback into EMA = buy opportunity. Break of structure = deeper correction. So, the wild idea is to buy dips, not highs, as you watch for out for exhaustion at resistance.
DAX (DE30) — Sideways Compression Before Break
Looking at the chart, the DE30 price is ranging between support and resistance as both moving averages flatten, indicating loss of trend. The market is waiting for a catalyst.
Fundamental Context
European equities are reacting to Energy price uncertainty, ECB decision expectations(tomorrow), and Slowing economic signals. As of now, the price is in a range, and Range almost always leads to→ Breakout Setup. What to watch: Break above resistance → bullish continuation. Break below support → bearish expansion. A professional approach will be to avoid middle of range, and trade only confirmed breakouts.
USDCAD (H4) — Reversal Attempt in Progress
This pair's chart shows a strong previous(recent) downtrend. Price is now attempting a pullback reversal toward the 21 EMA, which is beginning to slope upward. This suggests price is reacting around a key support zone.
Fundamental Context
CAD is often priced on Oils. And Oil prices have been volatile due to geopolitical tension between USA and Iran in recent times. Canadian dollar strength tied to oil is more dominant in the short-term as seen on the chart, as Bank of Canada expected to hold rates tomorrow. In summary, a professional approach to trading this pair will be to condider the option of Short-Term Bullish Correction. A break above moving averages → bullish continuation, while a rejection will signify → trend push to the downward direction. Buying pullbacks cautiously is ideal, while watching oil + USD strength for confirmation
The Bigger Picture: Why Tomorrow Matters
This is not just technical trading anymore. Markets are currently reacting to Central Banks Rate expectations, Oil-driven inflation pressure, Geopolitical uncertainty, and USD liquidity flows. And here’s the key: Most central banks are expected to HOLD rates, but the real move will come from their forward guidance. This is where most traders get trapped. They focus on indicators, patterns, signals, but ignores macro narratives. As a trader what you should focus on is reaction to news, not prediction. You will also look closely at the chart for liquidity zones, not random entries. Also watch out for correlation between Oil, USD, and Indices. Your charts are not random— they always show market hesitation before a major move. If we combine the four charts as we see here, we can clearly see that: EURUSD → weakening structure, NASDAQ → strong but stretched, DAX → waiting for breakout, USDCAD → attempting reversal. This is a pre-event compression phase. And when compression meets central bank decisions? Expansion follows.