Weekly Forex Forecast: August 24–29, 2025
Based on Original Analysis by: DailyForex.com
The week of August 24–29, 2025, in the foreign exchange (Forex) markets is shaping up to be a dynamic period characterized by potential volatility, key economic data, and evolving central bank policies. Currency pairs will face heightened sentiment and trading volume, particularly as traders analyze incoming macroeconomic data and geopolitical risks. The following forecast provides detailed insights into the major currency pairs, global economic trends, and key catalysts to help traders position effectively for the upcoming week.
Global Macro Overview
As we look ahead to the final week of August 2025, several broad economic themes dominate the outlook:
– Central Bank Divergence: While the Federal Reserve remains data-dependent, inflation concerns are resurfacing across developed economies. Expectations vary about how aggressively central banks such as the ECB, BoJ, and BoE might respond.
– Emerging Market Uncertainty: Countries such as China and Turkey face capital flow pressures, which are influencing their currencies and broader risk sentiment.
– U.S. Economic Resilience: The U.S. economy has continued to surprise markets with strong consumption data and a resilient labor market. Traders are calibrating interest rate expectations in response.
– Commodity Price Shocks: Energy prices remain volatile, especially amid geopolitical tension in Eastern Europe and supply issues from OPEC+ decisions.
Major Currency Pairs Forecast
EUR/USD
After experiencing modest upside momentum last week, EUR/USD is entering the week with mixed sentiment. Recent PMI data from the Eurozone was disappointing, highlighting concerns over stagnating growth while inflation remains persistent. Meanwhile, the dollar strengthened slightly after a relatively hawkish tone from FOMC minutes.
Key Technical Levels:
– Resistance: 1.0950, 1.1000
– Support: 1.0830, 1.0750
Outlook:
– A breakdown below 1.0830 could usher in more downside, targeting July’s lows near 1.0700
– On the upside, a close above 1.1000 would suggest bullish continuation toward 1.1100
Fundamental Drivers:
– ECB’s cautious stance on further tightening due to slowing economic growth
– U.S. GDP data due later this week could reinforce divergence between both central banks
– German IFO business confidence numbers may reinforce Eurozone stagnation fears
Trade Strategy:
– Short-term traders could sell rallies near 1.1000 with tight stops
– Medium-term bias remains neutral to bearish unless Eurozone data improves substantially
GBP/USD
Sterling struggled to hold gains last week after the UK’s CPI print cooled more than expected to 4.1% YoY, reducing pressure on the Bank of England to maintain aggressive rate hikes.
Key Technical Levels:
– Resistance: 1.2800, 1.2920
– Support: 1.2620, 1.2480
Outlook:
– Consolidation near 1.2700 indicates indecision, with markets awaiting clarity from upcoming retail sales and GDP data
– A break below 1.2600 could open up a move toward early-August support around 1.2400
Fundamental Drivers:
– Dovish sentiment around BoE hiking cycle following cooling inflation
– UK property market indicators suggest weakness, which may impact future BoE actions
– U.S. rate policy continues to underpin strength in the dollar
Trade Strategy:
– Consider range trading strategies while bounded between 1.2620 and 1.2800
– Longer term, GBP may weaken if economic data continues to deteriorate and if U.S. yields rise
USD/JPY
The Japanese yen has remained weak as the Bank of Japan shows no urgency to change its ultra-loose policy stance, despite marginal inflation increases.
Key Technical Levels:
– Resistance: 151.25 (multi-decade high), 150.00
– Support:
Read more on USD/CAD trading.