Weekly Forex Forecast: 19th to 24th October 2025
Original article by DailyForex
As the trading week begins for October 19th to 24th, 2025, the global foreign exchange markets present a landscape marked by volatility and anticipation. Key macroeconomic indicators, central bank actions, and geopolitical developments continue to drive sentiment. The U.S. Dollar, Euro, British Pound, Japanese Yen, Australian Dollar, and cryptocurrencies like Bitcoin remain at the forefront of traders’ attention. Below is a comprehensive look at the major FX pairs and market factors to monitor this week, based on DailyForex’s technical and fundamental analysis.
Overview of the U.S. Dollar (USD)
The U.S. Dollar has continued its recent trend, influenced by shifting perceptions regarding Federal Reserve policy. The Federal Open Market Committee (FOMC) has remained cautious about the pace of interest rate hikes, leading to reduced expectations for further tightening. This environment has created headwinds for the USD.
Key takeaways:
– The Dollar Index (DXY) has shown signs of weakening, failing to maintain bullish momentum.
– Market speculation is increasing around the potential for rate cuts in early 2026 if economic data continues to show signs of cooling.
– Investors await new data releases, particularly the Core PCE Price Index and GDP readings later in the month.
EUR/USD Forecast
The Euro rallied modestly against the Dollar last week, buoyed by stronger-than-expected industrial production data out of the Eurozone. However, inflation remains a concern for the European Central Bank (ECB), keeping interest rate projections under scrutiny.
Outlook for the week:
– Technical indicators point to a possible resistance near 1.0650. A break above this level could open the door to a retest of the 1.0700 zone.
– Support remains near 1.0500; a move below this could indicate renewed bearish pressure.
– The ECB’s recent dovish tone may weigh on the Euro’s resilience against the Dollar in the longer term.
Key factors affecting EUR/USD:
– ECB monetary policy tone and upcoming statements from ECB President Christine Lagarde.
– German economic data, including manufacturing PMI and ZEW economic sentiment.
– U.S. macro reports related to labor markets and inflation.
GBP/USD Forecast
The British Pound has been trading in a narrow range, with market participants balancing concerns over UK inflation and sluggish economic growth. The Bank of England (BoE) has paused rate hikes but remains cautious due to persistent price pressures.
Technical perspective:
– GBP/USD is hovering around 1.2150, where it faces short-term resistance.
– Traders are eyeing 1.2000 as a major support zone. A break below this level could accelerate downward momentum.
– Indicators such as RSI suggest consolidation or a minor pullback before a potentially larger move.
Upcoming data to watch:
– UK CPI inflation numbers will be closely scrutinized for any surprises.
– Retail sales data and BoE communications could influence market sentiment significantly.
– U.S. economic cues will remain integral to the movement of this pair.
USD/JPY Forecast
The Japanese Yen continues to struggle against the Dollar, weighed down by the Bank of Japan’s (BoJ) ongoing ultra-accommodative stance. Despite mild verbal intervention by Japanese authorities about excessive currency weakness, there has been little in terms of concrete policy response.
Market highlights:
– USD/JPY remains above the psychologically important 149.00 level.
– Resistance lies near the 150.80 area, which could trigger more government commentary if tested again.
– Support is evident around 147.50, and a break below may trigger a deeper retracement.
Fundamentals to monitor:
– BoJ intervention risks amid Yen depreciation.
– U.S. Treasury yields, which are a primary influence on USD/JPY.
– Geopolitical tensions in Asia-Pacific that could support safe-haven flows into the Yen.
AUD/USD Forecast
The Australian Dollar experienced a moderate recovery
Explore this further here: USD/JPY trading.