The USD is slightly down compared to the EUR, JPY, and GBP as North American traders start their day. This report analyzes the EURUSD, USDJPY, and GBPUSD currency pairs, highlighting trends, risks, and targets to help make trading decisions.

Stock Market Overview

In the stock market, US stocks are opening with small gains. The Dow is up 134 points, the S&P index has increased by 1.81 points, and the NASDAQ has risen by 26.94 points. However, SMCI’s stock has dropped by 17.03% in premarket trading after disappointing earnings. It’s nearing the 50% midpoint from its April low to the August high at $44.70, with a recent resistance level around $49. Without surpassing this level, sellers may push prices down further. AMD shares fell by 5.46% to $164.75 in premarket trading, despite reporting positive earnings. The stock soared from July’s low to reach $182.50 last week. Traders are watching the 38.2% retracement at $163.70 closely. If the price dips below this level, it could move towards the midpoint at $158. Today’s economic calendar is free of major US or Canadian releases, but we have oil inventory data and a US Treasury auction scheduled. As the US dollar weakens slightly today, derivative traders should proceed with caution. This drop could be temporary before the 10-year Treasury auction at 1 PM ET, which will clarify interest rate expectations. A weak auction could quickly reverse the dollar’s minor losses by pushing yields higher. The mixed signals in the stock market, where major indices show slight gains, mask underlying weaknesses. Significant pre-market drops in key tech stocks like AMD and SMCI are warning signs for the Nasdaq and the broader S&P 500. Even good earnings news isn’t enough to maintain high valuations for these stocks.

Focus on the Tech Sector

We should pay attention to the nerves in the tech sector over the coming weeks. Profit-taking is occurring in stocks that have seen substantial increases, and this could spread. For derivative traders, this might be a good time to consider protective puts on the QQQ ETF, which tracks the Nasdaq 100, as a safeguard against a broader tech downturn. The recent July 2025 CPI data came in at 3.4%, slightly above the expected 3.3%, adding to the uncertainty. This has increased focus on the Federal Reserve’s September meeting, making traders less sure about pausing rate hikes. The VIX, or market fear index, has risen to 17.5 from the low 14s seen in July. The sharp decline in AMD, despite strong earnings, highlights the current market sentiment. Traders will be attentive to see if it maintains its 38.2% Fibonacci retracement level at $163.70. A drop below this support could signal a deeper correction in the semiconductor sector and among high-growth stocks. We should closely watch the bond market today for insights. We recall how a poorly received 10-year auction in late 2023 caused yields to spike and unsettled equity markets for weeks. A similar outcome today could strengthen the dollar and pressure growth stocks sensitive to rising borrowing costs. Create your live VT Markets account and start trading now.

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