The following article is a rewritten and expanded version of the original analysis titled “Pairs in Focus: 26th to 31st October 2025,” originally published by DailyForex. Credit goes to the original author for their insights. This version delves deeper into the major currency pairs analyzed, providing added context and clarification for a comprehensive 1000-word overview of the forex market outlook during the specified week.
Weekly Forex Market Outlook: Major Currency Pairs in Focus (October 26–31, 2025)
The final week of October 2025 in the forex market is poised to witness a continuation of global macroeconomic themes that have dominated sentiment in recent months: diverging central bank policy paths, inflation trends, and geopolitical uncertainties. Below is a deeper, pair-by-pair exploration of the key forex players this week, supported by technical analysis and driven by fundamental undercurrents.
EUR/USD: Testing Key Resistance After Bullish Move
The euro-dollar pair saw a bullish correction last week, briefly pressing against the 1.0700 level. The market has been tracking expectations regarding the divergence between the European Central Bank (ECB) and the Federal Reserve. While the Fed has remained hawkish due to strong U.S. employment and sticky core inflation, the ECB recently hinted at a more dovish stance owing to slowing growth in the Eurozone.
Key Technical Levels:
– Resistance:
– 1.0700 (psychological barrier and recent high)
– 1.0780 (38.2% Fibonacci retracement from July high)
– Support:
– 1.0600 (broken resistance turned support)
– 1.0510 (50-day EMA)
Forecast Insights:
– The EUR/USD pair could experience further upward momentum if U.S. data releases come in weaker than expected, pressuring the dollar.
– From a technical perspective, a break above 1.0700 opens room towards the 1.0780-1.0800 zone.
– On the downside, a reversal below 1.0600 could bring bears back into control, exposing the October low near 1.0450.
Traders should pay close attention to U.S. Q3 GDP and Core PCE inflation releases this week, which may uplift the dollar if they surpass expectations.
GBP/USD: Consolidation Around Support Despite Volatility
Sterling continues to test market nerves as economic indicators from the UK show signs of stagnation. The Bank of England (BoE) has signaled a pause on further interest rate hikes, causing GBP/USD to drift lower throughout October. However, slight dollar weakness late last week allowed GBP/USD to consolidate near 1.2100.
Technical Overview:
– Resistance:
– 1.2200 (pre-breakdown level)
– 1.2275 (key Fibonacci resistance)
– Support:
– 1.2100 (psychological support zone)
– 1.2030 (October low)
Market Sentiment:
– Bearish overall, with neutral undertones as long as the 1.2100 support area holds.
– A continuation below 1.2030 would likely signal a definitive bearish trend continuation with 1.1950 as the next target.
– A move above 1.2200 could inspire short-term buyers, but significant bullish follow-through requires macroeconomic backing.
BoE Governor Bailey is scheduled to speak this week, and any unexpected hawkish language could shift GBP sentiment. However, the current baseline suggests consolidation rather than breakout.
USD/JPY: Momentum Persists Despite Intervention Warnings
USD/JPY continues its upward trajectory, reflecting the sharp policy divergence between the U.S. Federal Reserve and the Bank of Japan (BoJ). The pair edged toward 151.00 last week, revisiting levels last seen during the 2022 currency interventions. This raises the risk of verbal or actual central bank action to halt yen depreciation.
Key Technical Points:
– Resistance:
Explore this further here: USD/JPY trading.