**Weekly Forex Market Outlook: EUR/USD, GBP/USD, and USD/CAD**
*Based on insights from the original article by John Benjamin on FXStreet, with additional market analysis and context.*
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## Overview
This week in the forex market, major pairs such as EUR/USD, GBP/USD, and USD/CAD are experiencing significant movements driven by a combination of economic indicators, central bank commentary, and ongoing geopolitical developments. Traders are closely monitoring policy shifts, inflation data, and key technical levels as the US dollar’s momentum continues to influence currency trends across the board.
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## EUR/USD: Consolidation Phase Amid Diverging Monetary Policies
### Fundamental Analysis
– **European Central Bank (ECB) and Federal Reserve Stance:**
The EUR/USD has been relatively range-bound as traders weigh the diverging monetary policy stances of the ECB and the US Federal Reserve. ECB officials have started to hint at possible policy adjustments, yet remain cautious about tightening due to sluggish growth within the eurozone. Meanwhile, the Fed’s rhetoric has leaned hawkish, with persistent signals that interest rates will remain higher for longer due to sticky inflation and resilient US economic data.
– **Inflation and Economic Data:**
Last week, German industrial production numbers and the eurozone’s retail sales disappointed, underpinning the narrative of a struggling European recovery. In contrast, US jobs data was mixed, but services PMI and ISM reports reinforced confidence in the American economy.
– **Upcoming Events:**
– Eurozone ZEW Economic Sentiment Index could provide further clarity on economic optimism in Europe.
– US Consumer Price Index (CPI) data remains the pivotal release, as it may further solidify expectations for the Fed’s next moves if inflation surprises to the upside or downside.
### Technical Analysis
– **Current Levels:**
The EUR/USD pair has spent the week fluctuating between 1.0730 and 1.0830, with a clear resistance level around 1.0850 that bulls have so far failed to breach.
– **Support and Resistance:**
– Immediate support lies at 1.0730, followed by the psychological 1.0700 level.
– Resistance is found at 1.0850 and a stronger ceiling near 1.0900.
– **Technical Outlook:**
The consolidation pattern suggests neither buyers nor sellers are in decisive control. A convincing break above 1.0850 could open room toward 1.0900 or higher, but downside risks remain if US data surprises with strength.
### Additional Perspective
According to a research note from ING Economics, the divergence in monetary policies is likely to keep EUR/USD under pressure barring a surprise from either central bank. With eurozone growth prospects weak and the Fed maintaining a cautious stance, traders may continue to favor the greenback.
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## GBP/USD: UK Fundamentals Face Growing Pressure
### Fundamental Analysis
– **Bank of England (BoE) Policy Outlook:**
Read more on AUD/USD trading.