Forecast Update for EUR/USD – August 25, 2025
Original author: Economies.com
The EUR/USD pair continues to demonstrate fluctuations within familiar resistance and support zones, as traders await further economic cues from both the United States and the Eurozone. On August 25, 2025, price action indicated restrained movement, signaling a possible consolidation phase in the short term. The prevailing sentiment in the forex market remains cautious, with an eye on upcoming economic indicators and potential central bank announcements.
Current Technical Overview
Price action on August 25 showed the EUR/USD pair facing selling pressure near the 1.0950 level while resting support around the 1.0880 mark.
– The 50-day Exponential Moving Average (EMA) has been acting as dynamic support, hovering near 1.0885.
– The 100-day EMA remains neutral, with sideways movement signaling indecision among traders.
– RSI (Relative Strength Index) held near the midpoint at 50, suggesting consolidation rather than overbought or oversold conditions.
Key Technical Levels:
– Immediate Resistance Zones: 1.0950 – 1.0975
– Next Resistance Level: 1.1000 psychological zone
– Support Levels: 1.0880 (minor support), 1.0825 (major support), 1.0770 (critical support)
These levels are being closely monitored as traders assess breakout or reversal potential in the EUR/USD currency pair. Any violation of these thresholds could trigger short-term volatility.
Fundamental Factors in Play
Renewed stability in the EUR/USD exchange rate appears to be tied to various economic variables from both sides of the Atlantic.
Eurozone Drivers:
– Recent PMI (Purchasing Managers’ Index) data pointed to contracting activity in both manufacturing and services sectors across major Eurozone economies.
– Germany, the largest economy in the bloc, posted a sharp drop in manufacturing output, causing heightened concerns over a possible recession.
– ECB (European Central Bank) officials have maintained a cautious tone, reinforcing that policy tightening could be paused if stagnation continues.
– Inflation readings have remained slightly above the ECB’s 2% target, though the pace of increase has moderated over recent months.
US Dollar Influencers:
– The Federal Reserve maintained its interest rate during its previous meeting but emphasized data-dependency for future moves.
– U.S. labor market data continues to show resilience, with unemployment remaining low and job creation above forecasts.
– Core inflation persists around 3.2%, keeping pressure on the Federal Reserve to leave the door open for potential future rate hikes.
– Dollar strength has been underpinned by consistent GDP growth and relatively strong consumer spending figures.
Short-Term Price Outlook
In the absence of strong directional catalysts, the EUR/USD pair appears to be forming a tight trading range. Market participants are likely to see subdued momentum until the release of the following macroeconomic events:
– U.S. Personal Consumption Expenditures (PCE) data due later this week.
– ECB policymakers’ speeches expected over the next few sessions.
– Eurozone employment data and inflation expectations update.
– Ongoing geopolitical developments, particularly pertaining to energy security in the Eurozone.
Scenarios for Price Movement
Investors and forex traders should prepare for various scenarios depending on how upcoming events unfold:
Bullish Scenario:
– EUR/USD breaks above the 1.0950 resistance and tests 1.1000.
– This would require weakening U.S. economic data or dovish Federal Reserve rhetoric.
– A daily close above 1.1000 could open the path toward the next resistance zone at 1.1070.
– Momentum indicators like the MACD turning positive would support upside continuation.
– Improved Eurozone data, especially in Germany or France, might further strengthen the Euro.
Bearish Scenario:
– If EUR/USD breaches the support at 1.0880 with strong momentum, downside targets at 1.0825 and subsequently 1.0770 could
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