**Weekly Forex Forecast: 17th to 22nd August 2025**
*Article inspired by and credit to: Adam Lemon, DailyForex*
As the financial markets transition into the latter part of August, the forex landscape is set to be influenced by a mix of lingering summer liquidity, potentially market-moving economic releases, and prevailing fundamental themes. Traders should stay alert as the balance between seasonal quietness and volatility triggered by unexpected developments can lead to sharp moves. In this weekly outlook for 17th to 22nd August 2025, we will analyze key currency pairs, the main scheduled events on the calendar, and critical technical levels, helping traders refine strategies for the week ahead.
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**Market Overview and Themes**
As we approach the mid-August period, several macroeconomic and geopolitical drivers are shaping forex price action:
– **Central Bank Divergence**: The diverging policy outlooks among the Federal Reserve, European Central Bank (ECB), Bank of England (BoE), and Bank of Japan (BoJ) continue to drive volatility, particularly in G10 FX. US inflation data has reaffirmed the Fed’s “higher for longer” narrative, supporting US dollar strength, whereas other central banks appear either dovish or data-dependent.
– **Inflation Trends**: Recent inflation prints from both the US and key economies like the Eurozone and the UK have produced mixed signals, keeping traders focused on each new data release for shifts in central bank guidance.
– **Safe-Haven Flows**: Geopolitical frictions in Eastern Europe and the West Pacific, as well as persistent concerns about Chinese economic growth, are increasing the probability of risk-off moves, benefiting the US dollar, Swiss franc, and Japanese yen.
– **Commodities and Emerging Markets**: The commodity landscape remains volatile, impacting commodity-linked currencies like the AUD, NZD, and CAD. In emerging markets, local events and global risk appetite are influencing flows.
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**Economic Calendar Highlights (17th-22nd August 2025)**
Several key events will hold traders’ attention this week:
– **Federal Reserve Meeting Minutes (Wednesday, Aug 20th)**: The release of meeting minutes may offer deeper insight into the US central bank’s current thinking, especially following the latest inflation and employment data.
– **Eurozone CPI Final (Wednesday, Aug 20th)**: With inflation persistence a concern for the ECB, traders will look for confirmation of trends and clues towards future rate decisions.
– **UK CPI and Retail Sales (Thursday, Aug 21st)**: These releases are crucial for GBP pairs, as they will further clarify the BoE’s stance on rates amid mixed signals from past data.
– **Australian Employment Data (Thursday, Aug 21st)**: The AUD could see strong volatility if employment figures surprise in either direction, given the RBA’s data-dependent stance.
– **Japanese Inflation and Trade (throughout the week)**: Occurring amid persistent speculation about the Bank of Japan’s gradual normalization after years of ultra-loose monetary policy.
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**In-Depth Technical Analysis of Major Forex Pairs**
Let’s examine the technical outlook for the main currency pairs:
**EUR/USD**
– *Background*: The euro has been under persistent pressure as the ECB tilts dovish in response to subdued Eurozone growth, while the US dollar is bolstered by strong incoming data and hawkish Fed rhetoric.
– *Technical View*:
– Support at 1.0650 continues to attract buyers, but a daily close below this level could open a path towards 1.0550.
– Resistance sits around 1.0800; multiple failures here have been followed by renewed selling pressure.
– The RSI on the daily chart remains neutral to bearish, suggesting momentum slightly favors the downside.
– *Trading Strategy*: Short-term rallies are likely to be sold into, and sustained moves below 1.0650 may encourage further short positioning.
**GBP/USD
Read more on GBP/USD trading.