Pairs in Focus: Market Outlook from October 5th to 10th, 2025
Adapted and expanded from the original analysis by DailyForex
As the global forex market continues to respond to shifting economic indicators and evolving geopolitical situations, traders are met with another pivotal trading week. From October 5th to 10th, 2025, several major currency pairs are poised for movement as investors respond to the latest updates in interest rates, economic data, and monetary policy. This in-depth analysis considers technical setups, fundamental drivers, and forward-looking insights for key currency pairs to help forex traders make informed trading decisions.
The article was originally published by DailyForex and the core projections and analysis credited to them have been expanded upon with additional context and fresh insights sourced from current financial news and market commentary.
Key Currency Pairs in Focus:
1. EUR/USD – Range-Bound Behavior Amid Shifting Monetary Signals
The Euro has struggled to gain consistent momentum, and the EUR/USD pair continues to trade within a fairly tight range. The pair closed last week near the 1.0640 mark after attempting to break above 1.0700 but failing due to stronger-than-expected U.S. labor data.
Technical Analysis:
– Resistance Level: 1.0700
– Support Level: 1.0570
– Momentum indicators such as the RSI (Relative Strength Index) remain neutral, currently hovering near 50 on the daily chart.
– The 50-day EMA is flattening out, indicating an absence of a dominant trend.
– The MACD continues to show shrinking histogram bars, suggesting decreasing momentum in either direction.
Fundamental Drivers:
– Despite some weaker manufacturing data out of Germany, the Euro area managed to post better-than-expected retail sales figures.
– The European Central Bank (ECB) remains cautious. While it kept rates steady last month, the prospect of tightening remains if inflation remains sticky above 2%.
– In contrast, the U.S. Federal Reserve has continued to emphasize a data-driven approach. Labor market strength and recent hawkish tones from Chair Powell weigh in favor of higher rates in the shorter term.
Takeaway:
– Traders should expect further consolidation between 1.0570 and 1.0700.
– A breakout above 1.0700 could test the 1.0750/1.0780 zone, while a breakdown below 1.0570 may offer open space towards the 1.0500 handle.
– Swing traders may find opportunities by trading the range, while momentum traders should wait for confirmation of breakout or breakdown.
2. GBP/USD – Sterling Treading Water Amid Mixed Data
The British pound has shown modest resilience against the U.S. dollar as economic data continues to be a mixed bag. While inflation remains subdued and wage growth slows slightly, consumer confidence is showing signs of recovery.
Technical Picture:
– Immediate resistance is located at 1.2290, which was tested early last week but rejected.
– Near-term support sits at 1.2150.
– The RSI is displaying divergence as price made a lower high, while RSI made a higher high. This could suggest bullish reversal potential.
– Price action stays below the 200-day moving average, indicating that larger trend momentum still favors sellers.
Macro Fundamentals:
– The Bank of England’s decision to hold rates steady has reassured markets, but Governor Bailey’s comments suggest rate cuts are being seriously discussed for early 2026 if disinflation continues.
– The UK services sector recorded slight expansion, moving PMI data back above 50, a positive signal for economic sentiment.
– U.S. dollar strength continues to limit GBP upside as U.S economic metrics remain robust, particularly job openings and consumer spending.
Trading Perspective:
– A confirmed break above 1.2290 may allow a retest of the 1.2430 region.
– Failure to hold above 1.2150 introduces downside risk toward 1.2050.
– C
Read more on USD/CAD trading.