Pairs in Focus: July 20–26, 2025 – A Deep Dive into Major Forex Trends
Adapted and expanded from the original article by DailyForex
As global markets continue to grapple with shifting economic indicators and geopolitical dynamics, the foreign exchange market is showing nuanced movements across major currency pairs. The week of July 20–26, 2025, carries considerable importance amid ongoing volatility in energy prices, fluctuating interest rate expectations, and central bank policy shifts.
In this comprehensive analysis, we take a focused look at the key forex pairs that traders and investors should monitor closely. These pairs not only reflect shifts in macroeconomic policy but also provide trading opportunities fueled by technical trends.
Key Forex Currency Pairs in Focus:
– EUR/USD
– GBP/USD
– USD/JPY
– AUD/USD
– USD/CAD
We will examine each of these pairs from both a technical and fundamental perspective and assess where they might be headed in the short to medium term.
EUR/USD: Consolidation Amid Diverging Monetary Policy Expectations
Current Price (as of July 19, 2025): 1.0845
The EUR/USD pair remains under pressure, hovering near a short-term resistance level after a recent recovery from its June lows.
Fundamental Overview:
– The European Central Bank (ECB) has adopted a cautious stance, indicating that while inflation remains persistent, no immediate interest rate hikes are planned.
– In contrast, the U.S. Federal Reserve is maintaining its hawkish rhetoric, with Chair Powell recently stating that a return to 2% inflation remains the primary goal, leaving the door open to one more rate hike in 2025.
– Economic data in the Eurozone remains mixed. Germany is fending off a mild recession, while peripheral nations are showing modest growth.
– On the U.S. side, consumer spending remains strong, employment figures are supportive, and the housing sector remains a pillar of macroeconomic strength.
Technical Outlook:
– The pair rebounded from a key support level near 1.0700 and is now trading just below resistance around 1.0850–1.0870.
– Key Resistance Levels: 1.0870, followed by 1.0940 and 1.1030.
– Key Support Levels: 1.0780, followed by 1.0700.
– Indicators:
– Relative Strength Index (RSI) hovers around 55, hinting at moderate bullish momentum.
– The 50-day Simple Moving Average (SMA) is approaching a crossover with the 200-day SMA—a potential golden cross that could bring more upside.
Outlook: Bullish bias in the short-term if the pair breaks above 1.0870. Otherwise, consolidation is likely within the 1.0780–1.0870 range.
GBP/USD: Momentum Builds, But Inflation Remains a Risk
Current Price (as of July 19, 2025): 1.2975
The British Pound has shown resilience recently, benefiting from an uptick in investor confidence and improving macroeconomic readings in the UK.
Fundamental Overview:
– The Bank of England (BoE) appears to be nearing the end of its tightening cycle. Inflation has dropped from 6.5% in early 2025 to around 3.2% in July, approaching its target.
– UK GDP reported a quarterly growth of 0.4%, beating expectations and reinforcing investor sentiment.
– However, services inflation and wage growth remain sticky, forcing the BoE to keep its finger on the trigger.
Technical Setup:
– GBP/USD has broken out of a descending channel that persisted through much of Q2.
– Resistance Levels: 1.3010, 1.3120
– Support Levels: 1.2850, 1.2730
– Indicators:
– MACD histogram is expanding positively, affirming bullish momentum.
– RSI is nearing
Read more on USD/CAD trading.