Title: Weekly Forex Analysis: Key Currency Pairs to Watch from August 31 to September 5, 2025
Original source: DailyForex.com – Analysis by Wayne Ko Seng
As the financial markets enter the early days of September, traders are closely watching major currency pairs for potential breakouts and trend continuation opportunities. With significant macroeconomic events unfolding, including central bank decisions, global PMI data, and heightened geopolitical tension, the foreign exchange market presents ample opportunities for both short-term traders and longer-term investors.
This weekly analysis reviews key currency pairs from August 31 to September 5, 2025, focusing on technical setups, support and resistance levels, and possible trading scenarios. The overview includes analysis for EUR/USD, GBP/USD, USD/JPY, USD/CAD, and AUD/USD based on recent price action, volume patterns, and broader market sentiment. Additional data has been incorporated from other reputable financial sources, including Bloomberg, Reuters, and TradingView.
EUR/USD: Consolidating Within a Broad Range
The euro-dollar pair is showing signs of consolidation after recent volatility. Despite persistent inflation within the Eurozone, the European Central Bank (ECB) has adopted a cautious stance, maintaining rates as economic growth continues to lag expectations.
– The pair started last week around the 1.0880 area and briefly reached a high near 1.0950 before retreating.
– Current support levels: 1.0850 and 1.0790
– Resistance zones: 1.0950 and 1.1000
Key technical indicators:
– Daily RSI remains neutral around 50, suggesting a lack of momentum in either direction.
– The 50-day moving average near 1.0885 is acting as dynamic support.
– Price action is squeezing between narrowing Bollinger Bands, indicating a potential breakout.
Market sentiment overview:
– Eurozone PMI data released last week was below expectations, fueling concerns about economic stagnation.
– Some ECB policymakers hinted at a possible rate cut if conditions fail to improve in Q4 2025.
– U.S. economic data outperformed expectations, supporting the US dollar and capping EUR/USD upside.
Outlook:
– Sideways markets likely to persist unless triggered by a surprise from U.S. economic data or ECB commentary.
– A break above 1.1000 may initiate a bullish reversal toward 1.1100, while a move below 1.0790 suggests a return to more bearish territory.
GBP/USD: Bears Regain Control
The British pound faced renewed pressure last week and remains vulnerable to further downside. The Bank of England has maintained its high interest rate policy, but increasing signs of economic slowdown have rattled investor confidence.
– GBP/USD fell sharply from the 1.2730 area to test 1.2590 support.
– Key support level: 1.2570 followed by 1.2490
– Major resistance: 1.2720 and then 1.2800
Technical landscape:
– Price capped below the 50-day EMA for a second week.
– A bearish engulfing candle formed on the daily chart following weak UK services PMI data.
– MACD histogram declining, showing increasing downside momentum.
Fundamental highlights:
– UK consumer confidence plummeted to its lowest in six months.
– Market participants are speculating a potential rate cut from the BoE in early 2026 if inflation trends lower.
– USD strength continues to weigh on GBP, especially after robust labor market figures in the U.S.
Trading guidance:
– Watch for potential breakdown below 1.2570 for a test of 1.2450.
– Buyers may return at the lower boundary, but only an upside break and daily close above 1.2800 would shift sentiment short-term.
USD/JPY: Bulls Eye 150 Mark
USD/JPY continues to climb steadily amid divergence between U.S. and Japanese monetary policies. With the Federal Reserve maintaining a hawkish bias and the
Read more on USD/CAD trading.