**Forex Market Weekly Outlook: Pairs in Focus from October 12 to 17, 2025**
Adapted and expanded from an article by DailyForex.com
The foreign exchange market closed the previous week with significant volatility caused by central bank expectations, geopolitical tensions, and persistent inflation fears. As the new trading week (October 12 to 17, 2025) unfolds, traders and investors continue watching key currency pairs for technical setups that may offer profitable opportunities.
This detailed outlook expands on the original analysis by DailyForex, authored by Crispus Nyaga, focusing on the major FX pairs: EUR/USD, GBP/USD, USD/JPY, AUD/USD, and USD/CHF. It includes in-depth technical perspectives, relevant macroeconomic updates, and price action forecasts to guide traders through this dynamic period.
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## EUR/USD: A Battle Around Parity
The EUR/USD pair remains one of the most watched in the world and continues to consolidate near the parity level (1.0000). After a brief rebound, the euro is facing renewed selling pressure due to weak economic data from the Eurozone and contrasts in monetary policy between the European Central Bank (ECB) and the US Federal Reserve.
### Key Factors Influencing EUR/USD
– **Monetary Policy Divergence**
While the ECB raised interest rates in September 2025 for the fourth consecutive time, its language turned more dovish, signaling a potential pause in the tightening cycle as recession risks rise.
In contrast, the US Federal Reserve remained hawkish in its September meeting, leaving the door open for another rate hike before year-end if inflation remains sticky.
– **European Economic Conditions**
Germany, France, and Italy reported weaker-than-expected industrial production and services PMI, pointing to a slowdown. Consumer confidence in the bloc also remains subdued.
Meanwhile, inflation is still above the ECB’s 2 percent target, complicating policy decisions.
– **US Economic Strength**
The US economy showed resilience. September’s Non-Farm Payrolls data surprised to the upside, and services PMI remained strong. These indicators support the Fed’s view that more tightening may be needed.
### Technical Analysis
– The pair failed to break the 50-day moving average near 1.0150
– Key resistance levels: 1.0150 and 1.0210
– Key support levels: 0.9950 and 0.9850
– The Relative Strength Index (RSI) on the daily chart hovers near 45, suggesting neutral momentum
– A break below 0.9950 could trigger a decline toward the 0.9800 region
### Forecast
The EUR/USD may remain range-bound between 0.9850 and 1.0150 as markets assess economic data and await the Fed’s November meeting. Any deviation in inflation data will likely be the next catalyst.
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## GBP/USD: Struggling Amid Political and Economic Headwinds
The British pound remains under pressure due to concerns surrounding the UK economy and political uncertainty. While the Bank of England (BoE) has raised interest rates, questions over its ability to manage inflation without triggering a deep recession weigh heavily on the currency.
### Key Drivers
– **Economic Weakness**
The UK economy contracted 0.3 percent in August, and forward-looking indicators point to further deterioration. High energy prices and elevated living costs continue to hurt consumption and production.
Unemployment ticked up slightly, and wage growth has started to soften.
– **Bank of England Policy**
The BoE raised rates to 5.75 percent in September but signaled that it may slow the pace of hikes. Inflation, now at 6.2 percent, remains one of the highest among developed economies.
– **Political Instability**
Political turmoil within the ruling Conservative Party and uncertainty regarding new trade agreements post-Brexit continue to depress investor confidence.
### Technical
Read more on USD/CAD trading.