Dollar Strength Continues As EURUSD Extends Its Bearish Trend

The Dollar Index continues to push higher and has now reached new 2026 highs after recovering above the important 101 level. The overall bullish structure remains intact, although after this strong recovery we could see a fresh setback in the near term, ideally developing as a wave 4 correction. In such a scenario, the 101 area could become an important support zone, as it also corresponds with the previous fourth-wave area. A pullback into this region could therefore offer an attractive opportunity for another bullish move if buyers defend the support. Once wave 4 is complete, the Dollar could resume higher within the larger impulsive structure.

The opposite setup can be seen on EURUSD, which has broken to the downside and moved to new 2026 lows, confirming that the bearish trend remains strong. The decline from the August highs continues to look impulsive and appears incomplete, suggesting that we could still see a full five-wave move lower. Before another leg down, however, EURUSD could develop a wave 4 recovery and retest the previous 2026 lows around 1.1324–1.1380. If that area acts as resistance, another sell-off could follow in higher-degree wave 5 of wave A, potentially completing the first leg of a second zigzag correction as shown on the daily timeframe.

Overall, the current structures continue to favor Dollar strength versus the Euro, although both markets could experience short-term corrective moves before the larger trends resume.