The following is a rewritten and expanded version of the original article “Pairs in Focus This Week: 8th to 13th February 2025,” authored by Chris Lewis and published by DailyForex. All rights reserved to the original author and publisher.
Forex Weekly Outlook: Currency Pairs in Focus (8th–13th February 2025)
Author: Chris Lewis
Original Source: DailyForex
As global markets navigate a rapidly evolving macroeconomic landscape, the week of February 8th through 13th, 2025, presents a number of key opportunities and challenges across major and minor currency pairs. With central bank decisions, inflation data, and bond market dynamics continuing to influence price action, traders should pay close attention to the technical and fundamental factors driving each currency pair.
Below is a comprehensive analysis of the most significant forex pairs to watch during this trading week.
EUR/USD: Dollar Flexes in Volatile Environment
The EUR/USD pair has shown unusual sensitivity to both policy dynamics and broader market sentiment. During the previous week, the pair experienced mixed momentum but ultimately settled near the 1.0810 area. The continued shift in bond yields and U.S. dollar strength remain central to this pair’s direction.
Key Drivers:
– The Federal Reserve’s hawkish stance is contributing to upward pressure on the U.S. dollar.
– ECB statements remain cautious but acknowledge signs of gradually improving eurozone inflation.
– Bond markets are projecting higher yields, adding upward momentum to the USD.
Technical Outlook:
– Support levels: 1.0750 and 1.0700
– Resistance levels: 1.0850 and 1.0900
– 200-day EMA is positioned around the 1.0840 region, creating a technical ceiling.
– Near-term sentiment favors neutral to bearish on disappointing eurozone data.
Traders should keep an eye on German industrial production data and any surprise comments from ECB officials that could push the euro higher or lower depending on the tone.
GBP/USD: Pound Faces Stiff Resistance
The British pound has been relatively resilient in the face of global risk aversion, but technical resistance levels around the 1.2675 mark continue to offer stubborn obstacles. The Bank of England remains a significant factor in this week’s moves, particularly as inflationary pressures remain persistent in the UK economy.
Key Fundamental Factors:
– UK inflation remains elevated, putting pressure on the BoE to maintain a tightening bias.
– Expectations for future rate cuts remain flat unless inflation eases significantly.
– UK Manufacturing Production and GDP numbers are expected, which could move the pound.
Technical Highlights:
– Resistance: 1.2675 and 1.2800
– Support: 1.2550 and 1.2480
– Market is capped by overhead resistance but remains supported by the 50-day EMA.
Traders should monitor market sentiment around risk assets and how the GBP reacts to domestic macro data. A strong GDP reading could renew bullish momentum, while weak data may prompt a retreat toward the support area.
USD/JPY: Surge Above 147 Signals Bullish Undertone
The USD/JPY pair ended the week trading above the 147 level, with strong upward momentum fueled by diverging monetary policy between the Bank of Japan and the U.S. Federal Reserve. With Japanese wage data and U.S. inflation ahead, this pair remains a trader favorite for breakout opportunities.
Primary Catalysts:
– Bank of Japan continues to display ultra-accommodative monetary policy.
– U.S. Treasury yields stay elevated, bolstering USD demand.
– Japanese household income and wage data could shift BoJ rate expectations.
Chart Considerations:
– Key Support: 146.25 and 145.40
– Resistance: 148.00 and 149.50
– The rising 50-day EMA supports the current uptrend, suggesting ongoing bullish continuation.
As inflation data hits the wires later this week, traders should focus on the yield differential between Japanese
Explore this further here: USD/JPY trading.