**Forex Outlook: Key Pairs to Watch (3rd to 8th August 2025)**
*Based on analysis by DailyForex. Supplemented with perspectives from ForexLive and FXStreet.*
**Weekly Overview**
As global markets transition into August 2025, forex traders are preparing for a dynamic week. The period from August 3rd to 8th is marked by several critical economic events that could spur notable volatility in the currency markets. The focus remains sharply tuned to how central banks shape monetary policy in the face of shifting inflation prospects, varying economic growth trends, and heightened geopolitical uncertainties. This analysis highlights the currency pairs most likely to experience meaningful movement and outlines the technical and fundamental drivers to watch.
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### Major Narrative for the Week
– **Central bank decisions and signals remain front and center**, as the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan all influence sentiment through monetary policy paths and commentary.
– **US economic data**—including labor market statistics, ISM indices, and inflation figures—will steer market expectations regarding future interest rate adjustments.
– **Geopolitical developments** such as ongoing tensions in Eastern Europe and fluctuating energy prices continue to create uncertainty.
– **Technical setups** across major pairs reflect critical juncture points, with several pairs testing multi-month support and resistance zones.
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## EUR/USD: Testing the Bottom of the Range
The EUR/USD is trading near the lower range of its broad consolidation, as investors digest diverging economic outlooks between the Eurozone and the United States. The dollar has shown resilience, primarily underpinned by robust US growth and continued hawkishness from the Federal Reserve.
**Key Influences:**
– Recent data points to relative US economic outperformance, further strengthening the dollar.
– Eurozone inflation softening and lackluster growth continue to weigh on the EUR.
– Market focus is on the European Central Bank’s tone: hints at further easing or dovishness could push the pair lower.
**Technical Highlights:**
– **Support Zones:** 1.0770 and 1.0700. A clear break below these levels could clear the way for deeper declines toward 1.0600.
– **Resistance Levels:** 1.0950, with 1.1020 as the next significant ceiling, coinciding with the 100-day moving average.
**Strategy Pointers:**
– Watch for a firm daily close below 1.0770 for potential short setups toward the 1.0600 target.
– Bulls will seek a rebound above 1.0950, which may signal an attempt to retest the mid-1.10s.
– Key events include US Non-Farm Payrolls and Eurozone inflation releases, which could set the next directional impulse.
*Supplementary view:* ForexLive analysts emphasize that a dovish ECB could accelerate the downside, while a surprise uptick in Eurozone core inflation may act as a temporary lifeline.
Read more on AUD/USD trading.