**Forex Market Analysis: Currency Pairs in Focus (October 5–10, 2025)**
*Based on original insights from DailyForex.com by Adam Lemon, enhanced with expanded analysis and recent market data.*
As the Forex trading week unfolds between October 5 and October 10, 2025, investors are keenly observing technical and fundamental trends across major currency pairs. Elevated geopolitical uncertainty, shifting expectations about global interest rates, and varying economic performance across regions continue to weigh heavily on currency volatility. This analysis offers a deep dive into selected currency pairs, highlighting support and resistance zones, probable trends, and the macroeconomic factors influencing market direction. The following pairs are among the most closely watched under current market conditions:
1. **US Dollar Index (DXY)**
2. **EUR/USD**
3. **USD/JPY**
4. **GBP/USD**
5. **AUD/USD**
Each pair provides a unique perspective on global macroeconomic trends, central bank policies, relative asset strength, and investor sentiment.
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## 1. US Dollar Index (DXY)
The US Dollar Index (DXY), which tracks the dollar’s strength versus a basket of major currencies, remains a vital barometer for overall USD momentum.
**Current Trend (as of October 5, 2025):**
– The DXY has continued its bullish ascent, supported by a combination of hawkish Federal Reserve signals and economic outperformance in the United States.
– The index currently trades just above the 107.50 zone, having broken through a key resistance zone at 106.90 last week.
**Technical Highlights:**
– Bullish momentum continues as long as the DXY remains above the 106.90 support area.
– RSI remains near overbought territory, suggesting potential consolidation, but no clear reversal signal is present.
– Daily moving averages (50 and 200-day) are sloping upwards, confirming the longer-term uptrend.
**Fundamental Drivers:**
– Expectations of sustained interest rate levels due to sticky inflation.
– Demand for USD as a safe-haven currency amid escalating conflicts in Eastern Europe and volatility in energy markets.
– Relative economic resilience — particularly in job creation and consumer spending — compared to other advanced economies.
**Outlook:**
The DXY may continue to climb toward 108.20 in the near term, especially if this week’s US jobless claims and inflation figures exceed forecasts.
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## 2. EUR/USD
The Euro has been under pressure in recent weeks as sluggish European growth prospects and dovish ECB tone contrast sharply with the US Federal Reserve’s message of “higher for longer.”
**Technical Overview:**
– EUR/USD is testing a key support zone near 1.0500, a level that held strong in Q2 2023.
– The pair has formed a descending channel since mid-August, indicating a bearish trend that remains intact.
– Weekly charts suggest strong resistance near the 1.0650–1.0700 range.
**Trading Levels to Watch:**
– Support: 1.0500, followed by 1.0440 (multi-year low).
– Resistance: 1.0650, then 1.0790.
**Macro Developments:**
– Sluggish growth in the Eurozone, with recent manufacturing PMI numbers hovering below 48 for key economies like Germany and France.
– ECB officials have hinted at possible easing by Q1 of 2026, in contrast to the Fed, which signals an extended pause.
– Rising energy costs in Europe have added downward pressure on the euro by exacerbating inflation risks.
**Trade Strategy Ideas:**
– Traders may look for potential breakout opportunities. A break below 1.0500 could target 1.0350.
– On the rebound, bullish momentum would require a close above 1.0700 to negate broader bearish pressure.
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## 3. USD/JPY
The Japanese Yen continues to struggle against
Read more on USD/CAD trading.