Weekly Forex Forecast: 13th to 19th July 2025
Original Author: Christopher Lewis
Source: DailyForex.com (https://www.dailyforex.com/forex-technical-analysis/2025/07/weekly-forex-forecast-13th-to-19th-july-2025/231100)
The forex market is setting up for another pivotal week as traders around the globe brace for fresh macroeconomic developments and central bank signals. The focus remains on inflation, interest rates, and policy speculation, all of which play crucial roles in determining investor sentiment and market direction. The week covering 13th to 19th July 2025 is poised to be driven by the interactions between technical resistance levels, macroeconomic data impact, and the expectations surrounding central banks including the Federal Reserve, European Central Bank, and Bank of Japan.
Overview of Key Forex Pairs
EUR/USD
The EUR/USD currency pair continues to fluctuate within a narrow channel. Traders are showing hesitation as no clear catalyst has emerged to break the pair significantly in either direction. The U.S. inflation report released last week had limited impact, indicating that market participants are looking for more decisive signals from the Federal Reserve.
Key observations:
– The pair is hovering just below the 1.0900 psychological resistance level.
– Support is established around the 1.0800 area, with further strong support below at the 200-day exponential moving average (EMA).
– Currently, the EUR/USD is locked in a sideways consolidation pattern.
– With the Fed expected to remain cautious, and the ECB likely to follow a similar path, volatility might remain subdued in the short term.
Looking ahead, any surprise in Eurozone economic data or any hawkish or dovish shift in Fed rhetoric could catalyze a breakout. Until that happens, technical traders will likely respond to signals at the edges of the defined range.
GBP/USD
The British pound remains relatively resilient against the U.S. dollar. Even in the face of broader market uncertainty, the GBP/USD pair has managed to sustain support from a combination of positive UK economic surprises and fading U.S. dollar strength.
Key technical and fundamental levels:
– Resistance is observed just below the 1.2900 level.
– The 200-day EMA continues to provide solid support near the 1.2600 level.
– Momentum remains largely neutral to slightly bullish, as the UK economy shows signs of stabilizing post Brexit-related volatility and cost-of-living pressures.
Despite global pressures, the pound’s recent strength reflects investor optimism surrounding UK retail performance and Bank of England’s more cautious tone on inflation. However, any deterioration in sentiment or disappointing UK GDP data could drag the pair lower.
USD/JPY
The USD/JPY currency pair continues to be one of the most watched in the forex markets due to its involvement in carry trades and yield differentials. The pair remains sensitive to interest rate expectations in both Japan and the United States.
Important dynamics:
– USD/JPY hovers above the 160.00 level, with resistance forming near 162.00.
– The 200-day EMA, well below the current price, is indicating medium-term bullishness.
– The Bank of Japan has sent mixed signals leading to confusion over future rate policy.
– Japanese inflation numbers and wage growth data will be critical for further direction.
The absence of clear policy adjustment signals from the Bank of Japan has kept the yen weak, especially as U.S. Treasury yields remain elevated. Should the BOJ shift toward a more hawkish tone or intervene verbally or directly, the long yen trade might return into focus.
AUD/USD
The Australian dollar has underperformed lately as traders weigh Chinese economic weakness against Australia’s domestic strength. Commodity-based currencies like the AUD are deeply connected to China’s performance, making current uncertainty around Chinese growth a central factor impacting the pair.
Market sentiments
Read more on EUR/USD trading.