EUR/USD Forecast for 29 September 2025
By: Christopher Lewis, DailyForex.com
Overview
The EUR/USD currency pair has recently shown signs of slight upward movement. As of 29 September 2025, the market has attempted to rally but remains close to significant resistance levels while still facing broader bearish pressures. The overall sentiment continues to reflect uncertainty, influenced by various macroeconomic and central bank policy factors.
Traders find themselves navigating a narrow range, capped by major resistance and supported by a downtrend that has dominated much of the recent price action in EUR/USD. The fluctuating sentiment around European economic data, in contrast with persistent strength in the U.S. Dollar, provides a dynamic and challenging landscape.
Current Market Behavior
At the time of writing, the EUR/USD has shown minor bullish momentum. However, this move lacks strong conviction and appears to be more of corrective action rather than a true reversal. Recent attempts to climb faced resistance near important technical zones, reinforcing the idea that this rally may be short-lived.
Key Market Observations:
– The EUR/USD pair lacks a decisive break above the 1.06 level, which has acted as a significant resistance threshold.
– Market participants are cautious, waiting for more substantial macroeconomic signals before committing to directional trades.
– Volatility remains relatively low, suggesting indecision or a holding pattern before upcoming central bank policy decisions.
Technical Analysis
Christopher Lewis points out that from a technical perspective, the EUR/USD remains weak despite small bounces. The pair is still operating underneath critical moving averages, which serve as indicators of prevailing momentum and potential resistance.
Key Technical Factors:
– The 1.06 level continues to serve as an important resistance threshold. Without a decisive daily close above this level, bullish momentum is unlikely to take hold.
– The 200-day Exponential Moving Average (EMA), a widely respected trend indicator, is positioned well above the current market price, reinforcing the notion of ongoing downward pressure.
– Lower highs across recent sessions suggest the pair remains in a longer-term downtrend, with rallies being sold into rather than sustained.
Support Zones To Watch:
– 1.0480: This is the immediate support level, with prior price action indicating buying interest near this area.
– 1.04: A psychological round number and technical support from previous consolidation zones.
– 1.03: If bearish momentum resumes, this deeper level could come back into play, having served as a pivot at various times in the last year.
Resistance Levels in Focus:
– 1.06: This level not only serves as resistance but also represents the barrier between short-term correction and potential trend change.
– 1.0650 to 1.07: This zone contains minor resistance hurdles, including former swing highs and minor Fibonacci retracement levels.
– 1.08: Considered a significant resistance area, the pair would need strong fundamental drivers to reach this level.
Macroeconomic Influences Driving the Pair
The trajectory of the EUR/USD continues to be partially dictated by diverging monetary policy expectations between the European Central Bank (ECB) and the Federal Reserve.
Key Influences:
1. U.S. Dollar Strength:
– The Federal Reserve maintains a more hawkish stance relative to the ECB.
– U.S. economic data, including GDP growth and low unemployment figures, support continued strong demand for the dollar.
– Higher yields on U.S. treasuries attract capital, placing upward pressure on the greenback.
2. Eurozone Economic Weakness:
– GDP growth across major EU economies remains underwhelming.
– ECB officials have shown a dovish tone, suggesting reluctance to raise interest rates at the same pace as the Fed.
– Inflation in the Eurozone is closer to target levels, reducing the urgency of further tightening.
3. Interest Rate Differential:
– Persistent yield differentials between U.S. and European bonds add strength to the dollar.
– Traders position accordingly, favoring
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