**Pairs in Focus: 20th to 26th July 2025**
*Original Author: Adam Lemon, DailyForex.com*
As the forex markets navigate through the middle of July 2025, traders continue to face a dynamic combination of macroeconomic releases, global risk sentiment, and technical patterns that shape opportunities across the major and minor currency pairs. The trading week of July 20th to 26th will see several key drivers and evolving trends that require close monitoring. In this in-depth article, we analyze prominent pairs, highlight prospective technical moves, and outline actionable strategies for traders eyeing the forex market landscape in the current week.
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## Overview of the Current Forex Environment
Heading into the third week of July, markets remain alert to multiple themes converging:
– Global central banks are entering the late stages of their tightening or normalization cycles, causing yield differentials to weigh significantly on currency flows.
– Equity indices, especially in the US and Asia, continue to show resilience, supporting high-beta currencies but also prompting safe-haven flows in moments of risk aversion.
– Economic data releases, especially in the US and Europe, now have outsized influences as traders scrutinize clues about recession risks, inflation persistence, or surprises in employment data.
## Key Forex Pairs to Watch
### 1. EUR/USD
The EUR/USD has remained in focus as traders respond to the latest European Central Bank (ECB) and Federal Reserve rhetoric.
**Key Technicals:**
– The pair has been capped repeatedly near the 1.0900 resistance, with a notable support base around the 1.0750–1.0780 range.
– The 50-day and 200-day simple moving averages are sloping upwards, suggesting an ongoing bullish undertone, but momentum is fading as RSI readings approach neutral territory.
– Daily candlestick structure highlights indecision near the lateral resistance.
**Fundamental Drivers:**
– European inflation data and US PMI releases will be pivotal in setting short-term direction.
– Recent hawkish signals from the ECB are being weighed against softer growth prospects in the Eurozone, while the Fed remains cautious amid mixed US data.
**Trading Strategy:**
– A confirmed breakout above 1.0900 could propel the pair to target 1.1050, offering long opportunities.
– Rejection and reversal signals at the resistance might tempt bears to drive the pair toward 1.0720.
– Watch for false breakouts or whipsaws surrounding major economic news.
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### 2. GBP/USD
Sterling has displayed resilience but is grappling with mixed UK economic signals and ongoing uncertainties about the Bank of England’s policy intentions.
**Key Technicals:**
– The 1.2950–1.3000 area is proving to be a significant resistance, with the 1.2750 mark now acting as near-term support.
– Price action shows a series of higher lows, reinforcing an ascending triangle pattern on the H4 timeframe.
– MACD is positive but showing diminishing momentum.
**Fundamental Drivers:**
– The UK’s inflation and retail sales data will set the tempo for pound moves as traders reassess the inflation trajectory and the BOE’s need for further hikes.
– Political uncertainty and wage growth readings are creating a noisy backdrop, inviting volatility.
**Trading Strategy:**
– Bullish momentum above 1.3000 could trigger stops and target the 1.3150 level.
– On the downside, a break below 1.2750 could expose the pair to accelerated selling down to 1.2600.
– Intraday traders should be alert to false breaks, especially in the lead-up to key data events.
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### 3. USD/JPY
The yen continues to trade on both yield and safe haven narratives, with volatility spikes on news of BOJ policy adjustments or US bond yield moves.
**Key Technicals:**
– The pair is consolidating between 157.50 and 160
Read more on GBP/USD trading.