**Weekly Forex Market Forecast: September 28 – October 3, 2025**
*Original analysis by: DailyForex.com*
The week of September 28 to October 3, 2025, is set to be eventful in the forex market, as several key economic data releases and central bank statements are expected to influence major currency pairs. Below is a comprehensive overview of the expected forex market direction for the week ahead, with a technical and fundamental examination of major pairs.
This forecast is based on analysis initially published by the team at DailyForex.com, with additional insights drawn from professional market resources such as FXStreet, Investing.com, and MarketWatch.
Let’s dive into the key themes and technical insights that traders should monitor in the upcoming trading week.
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## Macroeconomic Backdrop: What’s Driving Currency Markets?
Traders remain highly sensitive to macroeconomic data, as global inflation trends and central bank policy paths diverge. This week, the spotlight will be on:
– U.S. Non-Farm Payrolls (NFP) – scheduled for Friday, October 3
– Eurozone inflation data
– UK GDP and housing data
– Chinese manufacturing PMI
– Central bank speeches (Fed, ECB, and BoJ)
As we exit Q3 2025, central banks remain cautious. Inflation persists above target levels in most developed economies, yet labor markets show signs of softening. Central banks, particularly the Federal Reserve and Bank of England, are navigating a delicate balance between sustaining growth and reigning in inflation.
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## USD Outlook: Mixed Sentiment Ahead of NFP
The U.S. dollar experienced some volatility last week due to shifting expectations regarding Federal Reserve policy. The Fed maintained its interest rate at 5.50% but signaled the possibility of more rate hikes if inflation pressures resume.
Key drivers for USD this week:
– Friday’s NFP, which will likely determine near-term direction
– ISM Manufacturing PMI on Tuesday
– Fed Chair Powell’s speech on Wednesday
If job growth slows while inflation remains sticky, the Fed could be forced to remain hawkish longer, supporting the dollar in the near term.
### Technical Forecast for DXY (U.S. Dollar Index)
– Resistance: 107.50 and 108.90
– Support: 105.30 and 104.60
The DXY maintains a long-term uptrend, supported by a strong relative strength index (RSI) reading above 55. A move above 107.50 could extend bullish momentum, while a break below 105.30 may suggest weakening demand for dollars.
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## EUR/USD: Downside Risks Remain
The EUR/USD pair continues to struggle amid persistent eurozone economic weakness. Last week, the pair touched a two-month low near 1.0530, as sentiment deteriorated after German confidence data disappointed. Meanwhile, the European Central Bank (ECB) signaled limited room for further rate hikes, citing stagnating growth.
Traders will watch for:
– Eurozone CPI (Tuesday)
– ECB President Lagarde’s speech (Thursday)
Weak inflation or dovish commentary could push EUR/USD lower.
### Technical Analysis
– Resistance: 1.0650 and 1.0730
– Support: 1.0530 and 1.0450
The pair is trading below its 50-day and 100-day moving averages. RSI around 42 indicates room for more downside. Key support at 1.0530 may act as a floor, but a break could open the path toward 1.0450.
### Strategy Tip:
Bearish bias remains intact. Traders may consider short opportunities near 1.0650, aiming for a move back to 1.0500, with a stop above 1.0700.
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## GBP/USD: Consolidating Below 1.2200
The British pound has been muted as macroeconomic data from the UK has begun to reflect the impact
Read more on USD/CAD trading.