EUR/USD Weekly Forecast: Outlook and Technical Analysis for October 13, 2025
Original article by Matt Weller – Senior Market Strategist, FOREX.com
This article provides a comprehensive analysis of the EUR/USD currency pair as the spotlight forex asset of the week starting October 13, 2025. With macroeconomic data releases and central bank communications continuing to move the markets, the EUR/USD remains in focus due to its sensitivity to data from both the Eurozone and the United States.
As traders enter a new week, it is crucial to consider both the technical setup and fundamental drivers influencing the world’s most liquid currency pair. Below is an in-depth examination of the key factors shaping EUR/USD price action, based on the outlook delivered by Matt Weller at FOREX.com.
Fundamental Analysis: What’s Driving EUR/USD?
The euro and the dollar continue to be guided by diverging economic fundamentals. The story revolves heavily around relative interest rate expectations and economic growth outlooks on both sides of the Atlantic.
Key drivers impacting the euro:
– Slowing economic momentum across the Eurozone
– Weak inflation figures keeping pressure off the European Central Bank (ECB)
– Increasing political uncertainty, particularly in economies like Germany and France
– Concerns around stagnant industrial production
Drivers lifting the US dollar:
– The Federal Reserve’s indication that rates will stay higher for longer
– Resilient economic data from the United States, especially in the labor and services sectors
– Persistent inflation that could force the Fed to delay any rate easing
– Increased demand for the dollar as a safe-haven asset
Recent Data Highlights:
Leading into October 2025, the macroeconomic backdrop for the euro remains challenging. Key data points from the week prior illustrate a widening divergence between the two economies.
Eurozone indicators:
– German Factory Orders fell by 1.3% in August, worse than the expected 0.5% drop
– French Industrial Production also missed expectations, posting a 0.7% decline
– Euro Area Retail Sales contracted by 0.9% month-over-month, well below forecasts
– Composite Purchasing Managers’ Index (PMI) for the Eurozone stayed below 50, signaling contraction
US data:
– Non-Farm Payrolls for September surged by 280,000, beating expectations of 170,000
– The Unemployment Rate ticked lower to 3.6%, indicating continued labor market strength
– Core Consumer Price Index (CPI) rose by 0.4% month-over-month, still above the Fed’s 2% annual target
– ISM Services PMI remained strong at 54.9, suggesting expansion in the services economy
Impact of Central Bank Guidance:
Central banks remain the most significant drivers for EUR/USD, as traders assess the potential for changes in monetary policy in either region.
European Central Bank (ECB):
– ECB President Christine Lagarde emphasized the need for caution, suggesting that the eurozone economy remains fragile
– The ECB is expected to hold rates steady or potentially initiate easing in early 2026 if growth fails to recover
– Market participants are pricing in a more dovish tilt amid slowing inflation and waning demand
Federal Reserve (Fed):
– Fed Chair Jerome Powell reiterated that the Fed will maintain restrictive rates until inflation convincingly trends downward
– Interest rate futures imply a near 30% chance of another rate hike by December 2025
– The Fed continues to emphasize data dependence, but overall tone remains hawkish
Week Ahead: Key Events and Data to Watch
The upcoming week includes multiple high-impact events that could drive volatility in the EUR/USD pair. Traders and investors should monitor the following calendar items:
Monday, October 13:
– US Federal Reserve Vice Chair delivers a speech at a central banking forum
– Eurogroup meetings begin to discuss fiscal coordination across member states
Tuesday, October 14:
– ZEW Economic Sentiment surveys for Germany and the Euro Area
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