Title: Weekly Forex Forecast: EUR/USD, Oil, Gold (XAU/USD), and Silver (XAG/USD) Outlook – July 21, 2025
Original Author: Yohay Elam, FXStreet
Source: FXStreet.com
Overview
This week’s forex market outlook provides critical insights into some of the most watched instruments: EUR/USD, crude oil, gold (XAU/USD), and silver (XAG/USD). With recent macroeconomic data releases and escalating geopolitical tensions influencing financial markets, currency and commodity traders must reassess their strategies. The following is an in-depth analysis of these major instruments, explaining key support and resistance levels, expected trends, and market drivers for the week starting July 21, 2025.
EUR/USD: Mild Recovery Amid Mixed Economic Signals
The euro managed a modest recovery as last week ended, though concerns surrounding the European economy and a slightly more dovish Federal Reserve have impacted the pair’s trajectory. Nevertheless, the undercurrent of weak European growth and low inflation expectations remains.
Key Technical Levels
– Resistance:
– 1.0950: Previous resistance area where multiple attempts to rise faltered
– 1.1020: Psychological round number and prior consolidation point
– Support:
– 1.0830: Recently tested level with significant buying interest
– 1.0750: Medium-term floor with historical strength
Fundamental Drivers
– U.S. Data:
– The U.S. economy has maintained resilience, supported by strong employment data and better-than-expected retail sales. The relatively hawkish language from select Fed members continues to support the U.S. dollar.
– However, core inflation remains subdued, keeping the Federal Reserve cautious regarding tightening measures.
– European Economic Conditions:
– Germany, the region’s largest economy, continues to report underwhelming industrial data, with weak manufacturing surveys persistently weighing on the euro.
– ECB officials express persistent concerns about inflation undershooting targets, limiting the scope for any rate hikes.
Weekly Outlook
– Although the pair began to bounce from the 1.0830 support area, the bounce appears fragile unless we receive stronger Eurozone data.
– Expect EUR/USD to hover within a tight range absent a major catalyst, with upside capped near 1.0950 and downside vulnerability to 1.0750 if bearish momentum resumes.
Trading Strategy Ideas
– Bullish traders should look for a sustained break above 1.0950 to enter long positions targeting 1.1020.
– Bearish traders could consider shorting near 1.0950 with stops above 1.1020, aiming for median support at 1.0830 or deeper at 1.0750.
Crude Oil: Volatile Response to Supply Uncertainty and Demand Fluctuations
Oil prices rose sharply last week, driven by geopolitical uncertainty in the Middle East and supply concerns stemming from OPEC+ production alignment issues. However, demand-side risks related to slowing global growth continue to loom.
Key Technical Levels
– Resistance:
– $81.50: Last week’s high, where upward momentum stalled
– $83.00: Historical resistance that could trigger profit-taking if reached again
– Support:
– $78.00: Immediate reactionary support
– $76.50: Longer-term anchor
Fundamental Drivers
– Geopolitical Developments:
– Unrest in oil-producing regions continues to affect market pricing, igniting supply fear that drives bullish sentiment.
– OPEC+ members have expressed concern over non-compliant production quotas, fostering short-term price volatility.
– Demand Trends:
– Despite strong U.S. summer travel data supporting demand predictions, Asian economic indicators suggest a tapering trajectory that could moderate longer-term oil consumption.
– Chinese refineries have recently cut back on imports, indicating excess supply and weaker demand from the world’s largest energy consumer.
Weekly Outlook
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