TraderHubFX

Currency Market Overview

This weekly outlook provides an overview of the major currency markets, covering USD, EUR, GBP and JPY, including technical structure, market sentiment and key economic factors that may influence currency movements throughout the week.

EUR/USD – Daily Timeframe

EUR/USD has been under sustained bearish pressure over the past month and is currently testing a key Daily demand/support area.

As long as this demand zone continues to hold, the pair may have the potential to stage a recovery toward the nearest supply/resistance area. A confirmed breakout above the nearest supply zone would strengthen the bullish structure and could open the way toward higher resistance levels.

However, if price reacts negatively from the nearest supply area and fails to establish a bullish breakout, the broader bearish pressure may remain intact. A confirmed breakdown below the current Daily demand zone would increase the possibility of the pair extending its decline toward the next support/demand area.

Fundamental Outlook:

EUR/USD is also being driven by the relative monetary-policy outlook between the Federal Reserve and European Central Bank. The Fed raised its target range by 25 bps to 3.75%–4.00% on 16 September, while the ECB also raised its key rates by 25 bps earlier in September, taking its deposit facility rate to 2.50%. Both central banks are therefore dealing with elevated inflation, making incoming economic data particularly important.

For the week ahead, traders should closely monitor U.S. labour-market data, inflation expectations, economic activity data and comments from Fed officials. Stronger-than-expected U.S. data or increasing expectations of further Fed tightening could support the U.S. Dollar and maintain downside pressure on EUR/USD. Conversely, weaker U.S. data or a reduction in Fed tightening expectations could weaken the Dollar and support a EUR/USD recovery.

On the European side, attention remains on Eurozone inflation, economic growth and future ECB policy expectations. The ECB currently projects 2026 headline inflation at 3.0%, above its 2% target, while describing the euro-area economy as more resilient than previously expected.

Key Scenario: Rather than predicting the next direction, watch how price reacts around the current Daily demand area and the nearest supply zone. A confirmed breakout from either area may provide clearer direction for the next major EUR/USD move.