**EUR/USD Forecast – Forex Analysis for Friday, October 10, 2025**
*Original article by Matt Weller, FOREX.com*
The EUR/USD currency pair has exhibited steady behavior in recent sessions, caught in a tight range as traders digest macroeconomic data and anticipate future guidance from both the European Central Bank (ECB) and the Federal Reserve (Fed). As of mid-October 2025, the euro-dollar pair is hovering near key psychological and technical levels, presenting both challenges and opportunities for market participants.
This detailed forecast takes a closer look at recent price action, fundamental developments, and technical indicators to provide a deeper understanding of the pair’s likely path heading into next week.
Key Highlights:
– EUR/USD remains constrained below the 1.0700 level.
– The Federal Reserve’s rate trajectory continues to exert bearish pressure.
– ECB officials remain cautious, offering limited support to the euro.
– Technical indicators suggest a potential breakout, though direction remains uncertain.
Let’s explore the economic context, central bank stances, and technical patterns influencing the EUR/USD forecast for Friday, October 10, 2025.
Macroeconomic Background
The global economic landscape remains volatile. Markets are being shaped by persistent inflation across developed economies, diverging growth paths, and varying central bank responses. The eurozone continues to struggle with sluggish growth and limited signs of inflationary pressures gaining traction, while the US economy, although slowing, maintains relative resilience.
Key macroeconomic factors impacting EUR/USD include:
– US Core CPI for September showed a modest increase of 0.3% month-on-month. Although in line with expectations, the data reinforced the “higher-for-longer” Fed narrative.
– Weekly US jobless claims edged lower, indicating a still-tight labor market.
– The ECB’s recent comments underscore data dependency but don’t suggest aggressive tightening going forward.
– The eurozone composite PMI came in slightly revised upwards, though still below the key contraction line of 50, pointing toward stagnation.
These developments continue to create pressure on the euro while keeping the US dollar supported due to interest rate differentials.
Federal Reserve Outlook
Despite the Fed pausing its rate hikes in September, the tone from officials remains hawkish. Chairman Jerome Powell stated that additional tightening remains possible if inflation fails to trend lower.
The Fed’s Summary of Economic Projections (SEP) from the September meeting indicated that most members still see one more hike this year, and only modest cuts in 2026, compared to prior forecasts.
Hawkish Takeaways from the Federal Reserve:
– Dot plot suggests one more rate hike in 2025, keeping terminal rates higher.
– FOMC members stress that inflation, while moderated, has not reached target.
– Labor market data continues to support the possibility of sustained high rates.
– Fed Funds Futures imply approximately a 30% chance of a December rate hike as of this week.
Overall, the dollar remains broadly well-bid, and the yields across the US curve support further upside in the greenback, adding to EUR/USD bearish bias.
European Central Bank Position
In contrast to the Fed, the ECB has sounded more neutral in its recent statements. The September rate hike appears to be potentially the last of this cycle barring any inflation surprises.
Key points from ECB communications:
– President Christine Lagarde affirmed that rates are at a level that, if maintained for a sufficient duration, would help return inflation to target.
– ECB policymakers emphasize the importance of data and the risks of overtightening into a weakening growth environment.
– Inflation in the eurozone is showing signs of topping, suggesting limited room for monetary tightening.
The lack of hawkish follow-through from the ECB has weighed on the euro, especially as energy prices stay volatile and economic momentum softens.
Technicals: EUR/USD Trading Setup
Technical analysis shows that EUR/USD remains in a well-defined downtrend channel since July, with the pair most recently finding resistance around 1.0700. Thursday’s
Read more on EUR/USD trading.