Weekly Forex Forecast: July 27 – August 1, 2025
Original content by Christopher Lewis, published on DailyForex.com
(https://www.dailyforex.com/forex-technical-analysis/2025/07/weekly-forex-forecast-27th-july-to-01-august-2025/231767)
The upcoming trading week from July 27 to August 1, 2025, is expected to bring considerable attention in the forex markets as traders respond to recent economic data, central bank policy expectations, and ongoing geopolitical developments. Market sentiment remains mixed as uncertainty around inflation, monetary policy, and global growth weighs heavily on major currencies.
In this week’s forex forecast, we explore the outlook for key currency pairs, including EUR/USD, GBP/USD, USD/JPY, and others. Using both technical and fundamental analysis, Christopher Lewis at DailyForex.com examines potential price movements and support/resistance zones, helping guide traders through a pivotal period in the forex markets.
Overview of Market Sentiment
Market participants continue to wrestle with varying signals from central banks, especially the US Federal Reserve and the European Central Bank. The divergence in policy stance is likely to increase volatility, particularly across major currency pairs.
Key Themes Driving Forex Markets This Week
– Central Bank Speculation: Anticipated commentary and data influencing decisions by the Federal Reserve, ECB, Bank of Japan, and Bank of England.
– Inflation Trends: Recent inflation data across leading economies will factor into interest rate expectations. Higher-than-expected inflation may cause shifts in currency valuations.
– Geopolitical Tensions: Risks arising from trade disputes or political uncertainty may prompt flows into safe-haven currencies.
– Technical Positioning: Several major pairs are at inflection points on technical charts, suggesting potential for breakouts or sharp reversals.
EUR/USD Forecast
The EUR/USD currency pair has shown signs of weakness as it approaches a vital support level. The pair has faced resistance near the 1.1000 level and is now vulnerable to retesting the support at 1.0800 if bearish sentiment persists.
Technical Outlook:
– Resistance:
– 1.1000: A significant psychological and technical ceiling
– 1.1050: Converging with the 50-day EMA
– Support:
– 1.0800: Crucial structural level
– 1.0750: Below which opens room for a move toward 1.0600
Fundamental Factors:
– A potential divergence continues between the European Central Bank’s slower pace of rate cuts and the Federal Reserve’s tightening bias, supporting the US dollar.
– Eurozone economic indicators have underperformed relative to the US, limiting the euro’s upside potential.
Outlook: Bearish-to-Neutral
The euro remains on the defensive unless there is a major catalyst from upcoming economic data. Indicators point to potential declines unless buyers reclaim overhead resistance.
GBP/USD Forecast
The British pound maintains a relatively bullish posture, supported by recent hawkish signals from the Bank of England in response to persistent domestic inflation. That said, the pair faces strong resistance near the 1.3000 level.
Technical Outlook:
– Resistance:
– 1.3000: Key psychological resistance
– 1.3100: Confluence of horizontal resistance and overbought indicators
– Support:
– 1.2750: A vital near-term level
– 1.2600: Longer-term support from May’s lows
Fundamental Factors:
– The UK’s CPI data continues to come in hot, leading market participants to believe further rate hikes may be on the table.
– Political uncertainty linked to post-election turbulence could temporarily weigh on sterling sentiment.
Outlook: Neutral-to-Bullish
While the broader trend is upward, the pound must overcome the 1.3000 resistance barrier to resume its rally. A break and close above this level could extend gains toward 1.3200
Read more on EUR/USD trading.