Pair Analysis for the Week of August 31 to September 5, 2025
Original article by: DailyForex.com
The foreign exchange market remains profoundly reactive to both economic data and investor sentiment as we transition into September 2025. Current trends suggest that key currency pairs are being shaped by factors including central bank decisions, geopolitical uncertainty, and persistent inflation concerns across major economies. This in-depth analysis focuses on several major currency pairs and outlines potential technical scenarios and trading opportunities for the upcoming week.
EUR/USD
The EUR/USD pair continues to show signs of weakness in the broader outlook, trading within a descending triangle pattern over the last several weeks.
Technical Outlook:
– Price has remained below the 1.0900 level, a significant psychological and technical resistance zone
– The 50-day EMA (Exponential Moving Average) is trending downward and acting as dynamic resistance
– Support is noted around the 1.0765 – 1.0780 area, a zone that has held for the past few sessions
Potential Scenarios:
• A daily close below 1.0760 could signal continued bearish momentum and potentially open a path toward the 1.0650 level
• Conversely, a breakout above 1.0900 and a daily close above the triangle resistance may push the pair toward the 1.1000 handle
• The RSI (Relative Strength Index) remains neutral at around 45, not offering significant overbought or oversold signals
Fundamental Influences:
• The European Central Bank remains cautious, with mixed signals emerging from the latest policymaking commentary
• U.S. economic data remains resilient, supporting the USD and further limiting upside for the euro
• Keep an eye on U.S. Non-Farm Payrolls data and potential Fed commentary, which could influence price direction materially
GBP/USD
The British pound has struggled to maintain upward momentum, trading below the 1.2700 mark. Despite moments of recovery, the pair continues to reflect trader indecision as UK economic data underwhelms market expectations.
Technical Outlook:
– GBP/USD trades within a tight horizontal range between 1.2550 and 1.2730
– The price remains tethered around the 200-day EMA, indicating lack of a dominant trend
– Immediate resistance is seen at 1.2670, while support is near 1.2540
Possible Scenarios:
• A decisive break below 1.2500 may trigger a depth test toward 1.2380
• A bullish recovery above 1.2750 could encourage more buying, with targets at 1.2850 and 1.3000
• RSI is trending around the 50 level, again suggesting market equilibrium and potential for breakout in either direction
Fundamental Factors:
• UK inflation figures are cooling, diminishing expectations of further Bank of England tightening
• Political noise surrounding post-Brexit trade arrangements and fiscal policy uncertainty could weigh on investor sentiment
• The strength of the USD remains a headwind, with U.S. Treasury yields holding high ground
USD/JPY
The dollar remains strong against the yen, propelling USD/JPY to 2025 highs amid a widening policy divergence between the Federal Reserve and the Bank of Japan.
Technical Analysis:
– The pair has broken above the 147.50 resistance zone, reaching levels not seen since early 2022
– There is strong upward momentum, with the 20-day and 50-day EMAs pointing sharply higher
– Next resistance lies near 149.00, a major psychological and technical target zone
Upcoming Scenarios:
• A continued surge toward 150.00 is possible if risk sentiment remains controlled and U.S. data continues supporting higher yields
• A pullback toward 146.00 may occur on profit taking or any dovish shift by the Fed
• RSI is nearing overbought territory above 70, indicating a potential short-term correction
Macro Drivers:
• The Bank
Explore this further here: USD/JPY trading.