Weekly Forex Forecast: August 24–29, 2025
Source: Original analysis by DailyForex Analysts – adapted and expanded
The final full trading week of August 2025 is poised to be action-packed, driven by key global economic indicators, monetary policy expectations, and evolving geopolitical developments. Traders will be closely monitoring critical releases and central bank comments as markets digest mixed signals from previous weeks, particularly amid tightening pressures from some central banks and looming concerns about global economic growth resilience.
This week’s forex outlook will analyze major currency pairs, highlighting potential movements based on patterns observed in technical charts and supported by economic fundamentals and sentiment across the markets. We’ll also include a brief overview of key global macroeconomic data releases that will likely influence market direction.
Key Themes Driving Forex Markets This Week
Several major themes and developments are expected to dominate the forex landscape from August 24 to 29:
– Shifting interest rate expectations as central banks hint at pause or continuation in their rate hike cycles
– Divergence between the US Federal Reserve and other central banks like the European Central Bank (ECB), Bank of Japan (BoJ), and Bank of England (BoE)
– Resurgence in commodity prices influencing commodity-linked currencies
– Geopolitical risks including escalating trade and military tensions
– A relatively thin summer liquidity environment that could amplify volatility
Fed Caution and US Economic Indicators
The US dollar remains central to global forex flows. Over the past month, expectations surrounding Fed rate movements have begun to shift. While inflation is moderating, the US labor market remains resilient, which may support continued hawkishness. Last week’s release of sustained core PCE inflation has reinforced the idea that there’s still work for the Fed to do in curbing inflation toward its 2% long-term target.
Key data releases this week for the US:
– Durable Goods Orders (August 27): Projected slowdown could signal weakening business confidence
– Consumer Confidence (August 27): Will shed light on the sentiment that could lead the Fed to adopt a more dovish tone if numbers disappoint
– Initial Jobless Claims (August 29): A lower figure may support the strength seen in the labor market; large deviations could create dollar volatility
– Second estimate of Q2 GDP (August 29): Critical for shaping Q3 growth expectations
Technical Overview: Major Forex Pairs
EUR/USD – Possible Continuation in Downtrend
The EUR/USD pair faces sustained selling pressure as diverging economic indicators from the eurozone and the US continue to widen the gap. The ECB appears to have reached the end of its hiking cycle, while the Fed maintains a hawkish undertone.
– Eurozone PMI (released last week) reflects contraction in manufacturing and services
– Eurozone inflation figures released on August 29 will be crucial; markets expect a gradual decline but anything surprising could spark volatility
– On the technical front, the pair is trading below the 50-day moving average around 1.0800. A strong break under 1.0750 could open the path to the 1.0620 support zone, with further room to decline toward 1.0500 if sentiment remains negative
– Resistance remains at 1.0860 and then at 1.0940, where the 100-day MA could limit bullish corrections
GBP/USD – Consolidation Mode Suggests Uncertain Direction
Sterling has traded in a narrow range despite high inflation in the UK and expectations the Bank of England may still raise rates once more before the end of 2025. However, recessionary risks are becoming more pronounced across Britain, potentially weakening the pound in the medium term.
– This week’s catalyst will be the UK Housing Price Index (August 27) and Consumer Lending data
– GBP/USD remains near 1.2700, with key near-term support at 1.2600. A break below may open downside toward July lows near 1.2430
– Resistance lies at 1.
Read more on USD/CAD trading.