Title: Weekly Forex Forecast: August 24–29, 2025 — Market Trends, Technical Analysis, and Key Drivers
Original Forecast by: Adam Lemon, DailyForex
The Forex market continues to face heightened levels of volatility as various macroeconomic headwinds persist. With global inflationary concerns, diverging central bank policies, and geopolitical developments shaping currency dynamics, traders must pay close attention to both technical chart patterns and fundamental developments when assessing direction. In this extended and detailed version of the Weekly Forex Forecast originally authored by Adam Lemon for DailyForex, we’ll dive deeper into major currency pairs, outline key technical levels, and highlight important economic events that are likely to influence market sentiment from August 24 to August 29, 2025.
Overview of Market Sentiment
Last week’s trading reflected a mix of risk-on and risk-off sentiment. Fed Chair Jerome Powell and ECB President Christine Lagarde provided updates that hinted at a cautious policy approach, indicating that while inflation remains sticky in some countries, the trend is generally moving in the right direction. Both officials maintained data-dependent guidance, which has helped limit excessive volatility. However, markets remain sensitive to changes in sentiment and unexpected data surprises, especially in labor and inflation reports.
The U.S. Dollar Index (DXY) saw minor strength, bouncing off key support, while gold struggled to maintain gains amid a firmer dollar and rising yields.
Key Themes Driving the Week Ahead:
– Upcoming U.S. Core PCE data (the Federal Reserve’s preferred inflation measure)
– Eurozone inflation figures due mid-week
– British GfK Consumer Confidence numbers and inflation sentiment
– Ongoing developments surrounding U.S.-China trade dynamics
– Global shifts in bond yields and risk appetite
Let’s look at major currency pairs in more depth:
EUR/USD Forecast
The EUR/USD currency pair had a relatively stable week but remains trapped in a clear bearish technical channel, with little evidence of a sustained reversal at this point. The euro continues to be under pressure due to sluggish eurozone data, especially latest PMI figures suggesting a contraction in manufacturing and services.
Technical Analysis:
– Long-term downtrend remains intact
– Weekly resistance at 1.0900; significant resistance also at 1.1000
– Immediate support: 1.0725, followed by a deeper level near 1.0650
– RSI is under 50 on the daily chart, indicating bearish momentum still present
Fundamental Outlook:
– Watch out for German Ifo Business Climate report
– Eurozone CPI flash estimate may confirm inflation slowing faster than expected
– Continued cautious tone from ECB officials supports weakness in euro
Trading Strategy:
– Prefer short entries on rallies near 1.0900
– Wait for bearish confirmation candlesticks before short entries
– Potential downside targets include 1.0720 and 1.0650
GBP/USD Forecast
The British pound remains sensitive to domestic data and broader risk sentiment. Despite some positive inflation surprises over recent weeks, the Bank of England has tempered its hawkish tone amid weakening UK consumer strength and broader economic uncertainties.
Technical Landscape:
– Price action suggests consolidation in the 1.2650–1.2850 range
– 200-day moving average acting as key dynamic support near 1.2690
– Fibonacci resistance at 1.2850 capped gains last week
Fundamentals to Watch:
– UK GfK Consumer Confidence and Nationwide Housing Price Index will be key
– BOE members’ speeches could impact rate expectations
– UK economy likely to report sluggish retail performance
Trading Ideas:
– Short-term long entries may offer reward near 1.2650 with tight stop-loss
– Prefer short positions if price fails to break above 1.2850 on strong volume
– Key direction likely will be revealed after UK inflation sentiment data
USD/JPY Forecast
USD/JPY continues to be supported by rising U.S. Treasury yields and Japan’s dovish central bank
Read more on USD/CAD trading.