EUR/USD Weekly Forecast (7th to 12th September 2025)
By: DailyForex.com
Overview
During the trading week of September 7th to 12th, 2025, the EUR/USD currency pair demonstrated a persistent bearish tone amid a combination of macroeconomic pressures and technical breakdowns. The pair extended its downward trend from recent highs, falling below critical technical levels as investor sentiment leaned heavily toward the US dollar.
This article provides a detailed analysis of the drivers behind the EUR/USD movements over the week, the significant levels that were tested, and expectations heading into the upcoming week. Technical indicators, economic events, and sentiment analysis are all considered to provide a comprehensive outlook.
Key Themes of the Week
Several factors contributed to the continued weakness in the EUR/USD pair. Chief among them were diverging economic trajectories between the United States and the Eurozone, stronger-than-expected US economic indicators, and caution over the European Central Bank’s (ECB) policy path. Below are the most impactful factors influencing the pair’s trajectory:
– Hawkish Tone from the US Federal Reserve:
– Stronger-than-anticipated US employment data early in the week increased expectations that the Federal Reserve might maintain higher interest rates for a longer period.
– Federal Reserve policymakers reinforced this sentiment by suggesting that inflation pressures remain a concern, which could warrant tighter monetary conditions.
– Rising short-term bond yields in the US supported the dollar further, creating increased downside pressure on EUR/USD.
– Weak European Economic Indicators:
– Eurozone economic data released during the week highlighted continued weakness, particularly in Germany, where industrial production and factory orders disappointed markets.
– PMI readings across the Eurozone remained in contraction territory, reflecting a sluggish business environment.
– Inflation in the Eurozone showed moderation, reducing the urgency for further rate hikes by the ECB and thereby shrinking the yield advantage previously held by the euro.
– Divergence in Central Bank Policies:
– While the US Federal Reserve maintained its hawkish policy stance, the ECB seemed increasingly cautious about further tightening, citing downside risks to growth.
– Market sentiment priced in potential ECB pauses or cuts in 2026, undermining bullish momentum for the euro versus its US counterpart.
Technical Analysis
Throughout the week, the EUR/USD pair faced sustained selling pressure, breaching several key technical support levels. The trend continued downward in alignment with momentum indicators, and bullish recoveries were met with resistance around notable Fibonacci retracement areas.
Daily Chart Overview:
– Early in the week, the pair attempted to stabilize above the 1.0800 level but failed to establish a solid base.
– Bearish pressures intensified by midweek, pushing the pair below the 1.0750 area. This break confirmed further downside momentum.
– A low was reached around the 1.0675 zone, marking a critical support area touched multiple times throughout 2024.
– Moving averages turned negative, with the 50-day MA crossing below the 100-day MA, indicative of medium-term bearishness.
– Momentum indicators such as RSI dropped below the 40 level, reflecting continued weakness, although oversold territory has not yet been reached.
– MACD also issued a bearish crossover, confirming that the momentum remains aligned with more downside potential.
Key Support and Resistance Levels:
– Resistance Zones:
– 1.0800: Previously a support level, now turned resistance. A psychological round number that could cap short-term bullish corrections.
– 1.0880: August highs and a confluence of the 50-day moving average.
– 1.0950: Longer-term resistance that aligns with a key Fibonacci level (61.8%).
– Support Zones:
– 1.0670: Weekly low, and a previous demand area that may offer some buying interest.
– 1.0600: A psychological level and a support area from Q2 2024.
– 1.0525: Key long-term
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