Created on March 17, 2025

• EUR/USD bulls have recently attempted to maintain movement around and above the 1.0900 resistance to ensure an upward trend reversal.
• However, the upward rebound gains for the EUR/USD pair stopped around the 1.0947 resistance level, the highest for the pair in five months.
• The currency pair will start trading the new important week stable around the 1.0875 level, as Forex investors continue to monitor the reaction to the US Federal Reserve’s announcement this week, the tone of the bank’s policy statement, and the statements of its governor, Jerome Powell, amidst global political and trade shifts that threaten the future of economic recovery and the new US administration’s desire for lower interest rates.

German Stimulus Supports Euro Gains

According to recent forex market trading, the euro rose against other major currencies in general, thanks to news of the German Green Party’s approval of Merz’s plans. German politicians had overcome a major hurdle by approving an unprecedented spending package proposed by new German Chancellor Friedrich Merz as part of a spending revolution. Overall, the Green Party’s approval means a solid majority in the Bundestag to pass the constitutional amendments needed to boost borrowing for infrastructure and defence investment.

The German stimulus plan aims to allocate approximately 2% of GDP annually to infrastructure and defence spending over the next ten years. As a result, according to licensed trading platforms, the EUR/USD pair jumped back above the 1.09 resistance level, and German 10-year bond yields rose 5 basis points to 2.93.

For his part, German Chancellor Merz agreed to allocate approximately 10% of the €500 billion infrastructure spending package to environmental and climate investments, in an effort to win the support of his junior coalition partner. The euro’s performance was clearly sensitive to concerns about stalled negotiations. Overall, the constitutional amendment legislation must be passed in the current Bundestag, where the CDU/CSU, the SPD, and the Greens hold the required two-thirds majority. Economists believe these plans will allow Germany to invest up to €1 trillion over the next decade, providing a much-needed boost to Europe’s largest economy. They believe this will help lift all restrictions on economic activity. However, this type of spending takes time to plan and implement, meaning it won’t be effective until 2026.

Trading Tips:

Be cautious, EUR/USD gains, unless they gain new positive momentum, may be subject to profit-taking selloffs, and be cautious of the important events of this week.

EUR/USD Forecasts for the Coming Days

In this regard, according to Forex market experts, DNB Markets raised its short-term Euro forecasts, citing a change in investor sentiment and increased optimism about the prospects of the European economy. However, the improved forecast target remains below the current level, reflecting the continued “optimistic” stance towards the US dollar. This upgrade is necessary to reflect the sharp rise in the Euro’s value, which saw its biggest rise since 2009. This rise is due to renewed confidence in European growth and the fading of US economic exceptionalism. DNB market experts added in a special note: “The news last week about a German ‘whatever it takes’ fiscal approach to infrastructure and defense has turned sentiment from pessimism to optimism.” However, the bank remains optimistic about the US dollar in the long term, maintaining its 12-month EUR/USD forecast at 1.06, and warning that recent US economic concerns may be exaggerated.

The bank now expects EUR/USD to reach 1.04 in three months, up from a previous forecast of 1.00. EUR/USD may break the 1.12 level – prepare! Morgan Stanley raises its targets, indicating a major shift in currency dynamics.

For its part, DNB Markets dismissed recent US economic growth concerns as overblown and continues to expect the Federal Reserve to raise interest rates in December, contrary to market expectations of a rate cut. While acknowledging the global uncertainty, the bank predicted the US dollar would regain strength as markets adjust to improved US economic fundamentals.

However, the Danish National Bank also highlighted a potential long-term shift in global capital flows, as investors reassess risks associated with US trade policies and international relations. The Danish National Bank warned that “if we are on the cusp of a structural shift in global savings, we are opening the door to a significant repricing of the US dollar beyond what we have already experienced.”

Despite this uncertainty, the bank emphasizes the strength of US economic fundamentals and believes that near-term market pricing is overreacting to geopolitical risks.

EUR/USD Technical Analysis Today:

Based on recent trading on the daily chart above, the EUR/USD pair is still on an upward trajectory. Moreover, bulls may need to move towards the psychological resistance of 1.1000 to confirm control of the trend. Simultaneously, this peak will move technical indicators towards strong overbought levels. At the same time, and over the same timeframe, a move towards the support level of 1.0760 will be important for bears in the event of a breakout of the current ascending channel.

We expect the EUR/USD pair to remain within narrow ranges around its current trajectory until financial markets and investors react to the US Federal Reserve’s announcement, the Governor’s remarks, and a package of important US economic releases, in addition to the trajectory of Trump’s trade and political policies.

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Intraday Trading:

Gold is currently trading within a narrow range of sideways movements at intraday levels.

It is aiming to build positive momentum that could help it surpass the psychological barrier at $3,000, a level it touched during last Friday’s session.

The price also managed to shake off the bullish exhaustion, as indicated by the RSI signals.

Next Price Target:

The next target is set at $3,055, according to the short-term symmetrical triangle pattern.

This target comes amid strong control by the primary uptrend and price trading in line with the trendline.

Positive Scenario:

The bullish scenario hinges on the price remaining above the support level at $2,950.

A break below this level could trigger downward pressure and potentially initiate a corrective wave that may take some time to unfold.

• GBP/USD trades in a narrow channel above 1.2900 on Monday.
• The Fed and the BoE will announce monetary policy decisions later this week.
• The pair clings to a slightly bullish bias in the near term.

Although GBP/USD registered modest losses on Thursday and Friday, the pair managed to end the previous week in positive territory. Early Monday, the pair moves sideways at around 1.2950.

During the European trading hours, US stock index futures lose about 0.5% on the day, pointing to a cautious market stance. Nevertheless, GBP/USD’s downside remains supported for now, with investors refraining from taking large positions in anticipation of this week’s key macroeconomic events.

On Wednesday, the Federal Reserve (Fed) will release the interest rate decision and publish the revised Summary of Economic Projections (SEP), the so-called dot plot. On Thursday, the Bank of England (BoE) is expected to maintain its monetary policy settings following the March meeting.

Ahead of the Fed and the BoE announcements, the US economic calendar will feature Retail Sales data for February on Monday. Investors expect Retail Sales to grow by 0.7% on a monthly basis, following the 0.9% contraction reported in January. A big negative surprise in this data could weigh on the USD with the immediate reaction and help GBP/USD edge higher. A bearish action in Wall Street, however, could support the USD later in the day and make it difficult for the pair to gather bullish momentum.

GBP/USD Technical Analysis

GBP/USD remains within the upper half of the ascending regression channel and the Relative Strength Index (RSI) indicator on the 4-hour chart holds slightly above 50, reflecting a lack of seller interest.

On the downside, 1.2920 (50-period Simple Moving Average (SMA), mid-point of the ascending channel) aligns as immediate support before 1.2870 (static level) and 1.2790-1.2780 (100-period SMA, lower limit of the ascending channel).

Looking north, resistance could be spotted at 1.2970 (static level), 1.3000 (static level, round level) and 1.3060 (upper limit of the ascending channel).

• The EUR/USD forecast shows a strong euro amid optimism over Germany’s fiscal plans.

• German parties agreed to change the government’s borrowing limits.

• Data on Friday revealed a sharp drop in US consumer confidence.

The EUR/USD forecast shows optimism over Germany’s fiscal plans, likely boosting the Eurozone economy. As a result, the euro has held near its recent five-month peak. On the other hand, the dollar remains subdued amid fears of a US recession due to Trump’s trade policies. 

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On Friday, reports revealed that German parties had agreed to change the government’s borrowing limits. Therefore, the 500 billion euro fund proposal might come to life, boosting defense and infrastructure. This, in turn, will support the Eurozone economy and strengthen the euro. 

Meanwhile, the dollar remained weak due to fears of the US recession and downbeat economic data. Trump’s aggressive trade policy changes have raised fears of a sharp slowdown in the US economy. Trump’s tariffs have ignited trade wars that will likely reduce trade in the global economy. Moreover, experts believe these duties will increase inflation, forcing central banks to keep interest rates elevated. 

Therefore, policymakers will likely remain cautious despite soft inflation numbers. Notably, data on Friday revealed a sharp drop in consumer confidence. The lack of confidence in the economy proves investors are worried about the impact of Trump’s tariffs. At the same time, inflation expectations jumped.

EUR/USD key events today

• US core retail sales m/m
• US retail sales m/m

EUR/USD technical forecast: Bulls battle to keep control at the 30-SMA

On the technical side, the EUR/USD price has recovered to retest the 1.0901 resistance level. As a result, it has broken back above the 30-SMA, showing bulls are struggling to keep control. At the same time, the RSI trades above 50, suggesting strong bullish momentum.

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Previously, the RSI had made a bearish divergence that signaled a likely reversal. This allowed bears to return and push the price below the 30-SMA. However, they have failed to make a significant swing below the SMA. If bulls regain momentum, the price will break above 1.0901 to seek new highs. This would allow EUR/USD to go beyond the 1.1001 key psychological level. 

On the other hand, if bears are ready to take charge, the price will stay below 1.0901. Moreover, it might drop to retest the 1.0701 key level.

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• The USD/JPY weekly forecast indicates rising economic uncertainty in Japan.

• Trump imposed a tariff on steel and aluminum imports.

• Tariff fears overshadowed a downbeat US inflation report.

The USD/JPY weekly forecast turns positive as fears of the impact of Trump’s tariffs on Japan’s economy rise.

Ups and downs of USD/JPY

The USD/JPY price had a slightly bullish week as the dollar recovered with Treasury yields. Meanwhile, the yen gave up some gains as market participants worried about the impact of Trump’s tariffs on Japan. 

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Trump imposed a tariff on steel and aluminum imports, igniting trade wars with Canada and the Eurozone. This escalated fears of a global economic slowdown. As a result, traders sought safety in US Treasuries. Meanwhile, the tariff fears overshadowed a downbeat US inflation report. 

On the other hand, the yen eased as market participants focused on the vulnerable export-reliant Japanese economy. Trump’s tariffs might hurt the economy.

Next week’s key events for USD/JPY

Next week, market participants will focus on monetary policy meetings by the Bank of Japan and the Fed. Moreover, the US will release its retail sales report, showing the state of consumer spending. 

Economists believe both the Bank of Japan and the Fed will keep interest rates unchanged. However, BoJ policymakers might maintain a hawkish tone, signaling future hikes. Meanwhile, the Fed might remain cautious due to uncertainty regarding Trump’s tariffs.

USD/JPY weekly technical forecast: Eying 149.00 key level

On the technical side, the USD/JPY price is climbing after meeting the 0.618 Fib retracement. However, the price is still below the 22-SMA. At the same time, the RSI trades below 50, supporting strong bearish momentum. Since the price broke below the 22-SMA, it has maintained its position below this line, indicating a strong downtrend. Furthermore, the price has consistently made lower highs and lows. 

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The downtrend recently made a milestone move by breaking below the 149.00 support level. After the break, the price has risen to retest this level as resistance. If it holds firm, bears might resume the downtrend. However, the price would have to break below the 0.618 Fib retracement. This would allow USD/JPY to target the 142.00 support level. 

On the other hand, if bears fail to break below the 0.618 Fib, bulls might push the price back above 149.00. A break above the SMA would signal a likely reversal.

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• The GBP/USD weekly forecast shows escalating fears of a US recession.

• Downbeat US inflation figures increased expectations for Fed rate cuts.

• Data on Friday revealed an unexpected contraction in the UK economy.

The GBP/USD weekly forecast is positive despite the paused rally, as escalating US recession fears weigh on the greenback. 

Ups and downs of GBP/USD 

The GBP/USD price had a slightly bullish week as the dollar fell due to fears of the US recession. Meanwhile, a downbeat UK GDP report kept a lid on gains. 

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This week, Trump imposed a 25% tariff on steel and aluminum imports. This tariff affected the Eurozone and Canada, who responded immediately. The trade wars dimmed the outlook for the global economy and increased US recession fears. Meanwhile, downbeat US inflation figures increased expectations for Fed rate cuts. 

On the other hand, the pound fell after data on Friday revealed an unexpected contraction in the UK economy. This put pressure on the BoE to lower borrowing costs.

Next week’s key events for GBP/USD

Next week, the US will release its retail sales report. Meanwhile, the UK will release employment data. Moreover, market participants will focus on the Fed and Bank of England policy meetings. 

Market participants expect the Fed to keep interest rates unchanged. However, traders will focus on the messaging during the meeting for clues on future moves. Similarly, investors expect the Bank of England to hold rates on Thursday. The tone at the meeting will also give clues about future policy moves.

GBP/USD weekly technical forecast: Uptrend meets solid resistance zone

On the technical side, the GBP/USD price has reached a solid resistance zone comprising the 1.3000 key psychological level and the 0.618 Fib retracement. The bullish bias is strong, with the price far above the 22-SMA and the RSI near the overbought region. 

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Moreover, the price has maintained a bullish trend, making higher highs and lows and keeping above the 22-SMA. Therefore, bulls might be strong enough to break above the current resistance zone. However, the price needs a pause or pullback to the SMA after a sharp swing. If this happens, the price will fall to the 22-SMA before bouncing to retest the resistance zone. 

A break above this zone will clear the path for GBP/USD to retest the 1.3401 resistance. However, if the zone holds firm, bears might overpower bulls to push the price below the 22-SMA. This would allow the price to revisit the 1.2604 support level.

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The EURJPY pair formed new decline yesterday to achieve the first negative target at 160.00, forming new additional support line, to push it to form temporary positive rebound and settle near 161.05.

Now, stochastic attempt to provide the negative momentum and the stability of 161.60 barrier allow us to keep the negative overview, waiting to attack 160.00 level again, while breaking it will open the way to target new negative stations that might extend towards 159.30 and 158.85 levels.

The expected trading range for today is between 160.00 and 161.60

Trend forecast: Bearish

• GBP/USD stays below 1.2950 after posting small losses on Thursday.
• Disappointing macroeconomic data releases from the UK make it difficult for Pound Sterling to gather strength.
• The near-term technical outlook highlights a loss of bullish momentum.

After closing marginally lower on Thursday, GBP/USD stays on the back foot and trades below 1.2950 in the European session on Friday. Although the near-term technical outlook is yet to point to a buildup of bearish momentum, the pair could have a difficult time staging a rebound after disappointing data releases from the UK.

The data published by the UK’s Office for National Statistics (ONS) showed early Friday that the UK’s Gross Domestic Product (GDP) contracted by 0.1% on a monthly basis in January. This reading followed the 0.4% growth recorded in December and came in below the market expectation for an expansion of 0.1%.

The ONS further reported that Industrial Production and Manufacturing Production fell by 0.9% and 1.1%, respectively, on a monthly basis. Both of these prints came in worse than analysts’ estimates, weighing on Pound Sterling.

The US economic calendar will feature the University of Michigan’s preliminary Consumer Sentiment Index data for March. A noticeable deterioration in consumer confidence could cause the US Dollar to come under pressure and allow GBP/USD to limit its losses.

Meanwhile, US stock index futures rise between 0.5% and 0.1% in the European session on Friday. So far, Pound Sterling has failed to benefit from improving risk mood. Nevertheless, a risk rally in the American session could hurt the USD and support GBP/USD.

GBP/USD Technical Analysis

GBP/USD’s last candle on the 4-hour chart closed below the 20-period Simple Moving Average (SMA). Additionally, the Relative Strength Index (RSI) indicator retreated to 50, reflecting a lack of buyer interest.

On the downside, 1.2900 (round level, static level, mid-point of the ascending regression channel) aligns as first support before 1.2850 (static level) and 1.2800 (200-day SMA). Looking north, resistances could be spotted at 1.2970 (static level), 1.3000 (round level, static level) and 1.3040 (upper limit of the ascending channel).

• EUR/USD holds steady at around 1.0850 in the European session on Friday.
• The technical outlook shows no signs of a buildup in directional momentum.
• UoM Consumer Sentiment Index data will be featured in the US economic calendar.

EUR/USD seems to have entered a consolidation phase at around 1.0850 after closing the previous two days in negative territory. The pair’s near-term technical outlook fails to provide a directional clue.

The US Dollar (USD) held its ground on Thursday as safe-haven flows continued to dominate the action in financial markets. Additionally, the data published by the US Department of Labor showed that the number of first-time applications for unemployment benefits declined slightly to 220,000 from 222,000 in the previous week.

Meanwhile, US President Donald Trump said in a social media post on Thursday that he would seek to impose 200% tariffs on European wine and champagne imports. In response, French Finance Minister Eric Lombard said Trump’s threat to augment tariffs on French liquor imports were not surprising and called his actions an “idiotic war.”

In the second half of the day, the University of Michigan will publish the preliminary Consumer Sentiment Index data for March. A noticeable deterioration in consumer confidence could hurt the USD ahead of the weekend and help EUR/USD keep its footing. 

Investors could also react to changes in risk perception. At the time of press, US stock index futures were up between 0.6% and 1%. A bullish action in Wall Street could make it difficult for the USD to outperform its rivals and open the door for a rebound in EUR/USD. 

EUR/USD Technical Analysis

EUR/USD retreated below the lower limit of the ascending regression channel and the Relative Strength Index fell slightly below 50, reflecting a lack of buyer interest. On the downside, 1.0800 (static level, round level) could be seen as next support before 1.0730 (200-day SMA). 

In case EUR/USD holds steady above 1.0850 (static level), it could face next resistance at 1.0900 (round level, static level) ahead of 1.0940 (static level).