Gold Holds Momentum – EUR/USD at a Turning Point

Market Update – October 2, 2025

Gold Holds Momentum – EUR/USD at a Turning Point

📰 Fundamental Context

• Gold remains the star of the markets, recently pushing above historic highs, supported by safe-haven demand, a weaker dollar, and expectations of continued Federal Reserve easing. As of this week, gold briefly tested levels near $3,800, marking a record rally.
• The US Dollar Index (DXY) continues to struggle, holding around 97 but unable to break above 98, reflecting persistent weakness amid Fed rate cuts and softer US macro data.
• EUR/USD is consolidating while testing key resistance areas. With the dollar under pressure, traders are closely watching whether the euro can sustain momentum for a breakout.
• Ongoing geopolitical tensions and global liquidity flows further drive demand for defensive assets like gold.

📊 Technical + Fundamental Analysis

Gold (XAU/USD)

Technical Outlook:

• Gold is holding firm above the demand zone at 3860, confirming strong bullish momentum.
• A sustained close above 3850 keeps the upside scenario alive, with 3920 as the next target.
• A break below 3850 could trigger a corrective dip into the FVG zone between 3839 – 3823, where a rebound is likely.
• Failure to hold that zone opens the way toward the OB demand zone at 3817 – 3793, expected to provide stronger support.
• A decisive break below 3790 would shift gold into a deeper corrective phase, signaling bearish control.

Fundamental Drivers:

• Ongoing Fed rate cuts reduce the opportunity cost of holding gold, boosting demand.
• Persistent dollar weakness strengthens gold’s appeal.
• Heightened geopolitical and economic uncertainties sustain safe-haven flows.

EUR/USD

Technical Outlook:

• The pair is approaching a key resistance zone between 1.17580 – 1.17782.
• If price fails to break higher, a corrective move is likely, with downside targets at 1.17120 and 1.16400.
• A confirmed breakout above 1.1800 would invalidate the correction, opening the path for a fresh bullish leg toward new highs.

Fundamental Drivers:

• Diverging policy paths between the Fed and the ECB remain central to EUR/USD’s direction.
• Continued Fed easing pressures the dollar, while signs of stability in Eurozone inflation could support the euro.
• Upcoming US labor and inflation data will be critical in shaping short-term momentum.

🎯 Market Scenarios

🧭 Conclusion

• Gold’s overall structure remains bullish, with pullbacks offering potential entry zones as long as 3790 holds.
• EUR/USD sits at a critical resistance; the next move will depend on whether bulls can break 1.1800 or if sellers push the pair into a correction.
• Traders should closely monitor US macro data, Fed commentary, and Eurozone updates, as fundamentals remain the ultimate driver of technical setups.

By Motasm Adel

Market Researcher and Analyst

Risk Disclaimer: This information is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own research and seek professional advice before making investment decisions.