Weekly Forex Forecast: 19th to 24th October 2025
By: DailyForex.com Analyst
Overview:
The trading week from October 19th to 24th, 2025, is set against a backdrop of shifting market sentiment, geopolitical uncertainties, and central bank decisions that continue to influence major forex pairs. The previous week saw relatively muted movements as traders awaited clarity from economic indicators and policy guidance. As we move into this new trading week, a mix of stabilization in global markets and anticipation of key data releases could drive volatility and create trading opportunities.
Here is a detailed technical and fundamental analysis of the major forex pairs to provide an outlook for the week ahead.
EUR/USD Outlook:
The EUR/USD has remained under moderate pressure due to diverging monetary policy expectations between the European Central Bank (ECB) and the U.S. Federal Reserve. Last week, the pair hovered around 1.0650, unable to sustain a reversal above key resistance levels.
Key Factors Influencing EUR/USD:
– The ECB remains cautiously dovish amid weak Eurozone growth data. With inflation seemingly under control and economic data pointing toward stagnation, the ECB is likely to maintain a dovish tone in upcoming speeches.
– In contrast, the Federal Reserve continues to project a “higher for longer” rates stance. While some investors still expect rate cuts in early 2026, the Fed remains firm on keeping inflation restrained.
– The geopolitical climate, including energy price volatility in Europe and uncertain impacts from global conflicts, may keep the euro vulnerable.
Technical Analysis:
– Support Levels: 1.0600 and 1.0550 are the immediate technical support zones. A break below 1.0550 would open the path toward 1.0500.
– Resistance Levels: The first resistance lies at 1.0700, followed by a stronger zone around 1.0760. A break above 1.0760 could initiate a broader short-covering rally.
– RSI remains neutral, and the MACD on the daily chart shows consolidation around the midpoint, pointing to a possible breakout scenario next week.
Trading Outlook:
Traders should look for confirmation of trend direction before entering new positions. Buying opportunities may arise only above 1.0760 with tight stop-loss placement. A break below 1.0600, on the other hand, could validate further bearish momentum.
GBP/USD Outlook:
The British pound struggled to find traction last week amid ongoing concerns over the UK’s economic health and market perception of the Bank of England’s (BoE) policy path.
Key Drivers:
– Mixed UK economic indicators continue to confuse traders. Whereas wage growth remains robust, consumer spending and PMI numbers suggest softness in key sectors.
– BoE members have given cautious signals, recognizing persistent inflation without strongly indicating either hikes or cuts.
– Sterling may have limited upside as traders are reluctant to price in substantial rate differentials compared to the Fed.
Technical Analysis:
– Support Levels: 1.2100 and 1.2000 are crucial. A breakdown below 1.2000 could indicate accelerated selling.
– Resistance Levels: 1.2250 remains a psychological barrier. Further resistance is near 1.2330, where selling pressure has emerged in recent weeks.
– The pair printed a doji candlestick pattern on the weekly chart, indicating indecision and potential breakout formation.
Trading Strategy:
Short-term bears could initiate trades below 1.2100 targeting 1.2000, while only a close above 1.2330 would invite bullish setups with limited upside potential.
USD/JPY Outlook:
USD/JPY remains one of the strongest trending pairs, supported by a resilient U.S. dollar and the Bank of Japan’s ultra-loose monetary stance. The pair successfully climbed above the 149.00 mark and appears poised to test the critical psychological level of 150.00 again.
Fundamental Perspective:
– The BoJ
Explore this further here: USD/JPY trading.