Weekly Forex Forecast: October 5, 2025 — Analyzing EUR/USD, USD/CAD, and S&P 500
Source: Original content by DailyForex.com
This week’s forex forecast highlights key trading levels, potential movements, and economic influences related to the EUR/USD, USD/CAD, and the S&P 500 index. Understanding the interplay of technical analysis and macroeconomic indicators is vital for informed trading. Below is an in-depth look at the weekly outlook based on market structures, candlestick patterns, and global economic factors that are currently shaping forex movements.
Authored by: Adam Lemon, adapted and rewritten for enhanced clarity and depth
Overview of Market Conditions
The global forex markets are navigating a phase of moderate volatility as traders interpret recent central bank signals, energy market dynamics, and inflation trends. With the U.S. Federal Reserve and other major central banks near the end of their tightening cycles, the focus has shifted toward clues indicating timing for future rate cuts or economic slowdowns.
Continued uncertainty regarding inflation and political developments in the U.S. and Europe has also created divergence in currency directions, with the U.S. dollar maintaining strength in some pairs while showing weakness in others, depending on the risk environment and regional economic figures.
EUR/USD Weekly Forecast
The EUR/USD pair has remained under downward pressure in recent sessions, suggesting a continuation of the medium-term bearish trend unless key resistance levels are broken.
Key Technical Observations:
– Price closed the week at approximately 1.0570, reflecting mild bearish sentiment.
– The 1.0600 level has acted as a short-term resistance over the past few weeks.
– The long-term descending trendline remains intact, further reinforcing downside bias.
– Daily Relative Strength Index (RSI) is in neutral territory, indicating room for further movement in either direction without an overbought or oversold signal.
Support and Resistance Levels:
– Immediate Support: 1.0500 — a psychological level and recent low.
– Stronger Support: 1.0350 — a level not broken since early 2023.
– Near-term Resistance: 1.0600 followed by 1.0750.
– Long-term Resistance: 1.1000 — major supply zone and previous highs.
Fundamental Drivers:
– The European Central Bank (ECB) is facing pressure to pivot from tightening as growth slows across the Eurozone. Euro area inflation dropped below 3% for the first time since 2021, reducing urgency for further hikes.
– By contrast, the U.S. Federal Reserve continues to signal a “higher for longer” interest rate environment, supporting the USD.
– Ongoing weakness in European economic data, including recent PMI readings below 50, further weigh on the Euro.
Trading Strategy:
– Bearish bias dominates the EUR/USD outlook unless there is a breakout above 1.0600 followed by a decisive move through 1.0750.
– Traders may look for shorting opportunities on rallies into resistance zones or breakdowns below intermediate support levels.
– For swing traders, a clean break under 1.0500 opens the door for a run to 1.0350.
USD/CAD Weekly Forecast
The USD/CAD pair has been buoyant, benefitting from a combination of steady U.S. economic data and commodity price uncertainties. The Canadian dollar’s performance remains tethered to oil price swings and domestic inflation readings.
Technical Overview:
– Price closed the week near 1.3615, maintaining its position above the important 200-day moving average (currently near 1.3500).
– A bullish flag developed last week suggests continued upside pressure.
– Weekly candle formation indicates buyers are maintaining control above 1.3580.
Support and Resistance Levels:
– Immediate Support: 1.3550 — previous resistance turned support.
– Strong Support: 1.3400 — multi-month horizontal level.
– Resistance: 1.3700 — near-term target and upper
Read more on USD/CAD trading.