EUR/USD Forecast: Currency Pair of the Week | October 7, 2025

• EUR/USD forecast: Pair stays under pressure amid French political uncertainty
• Fed rate-cut expectations cap dollar upside, but range-bound trading likely near term
• Government shutdown means no official data

 

This is not a week where the currency markets would be extremely busy, thanks largely to the lack of any major economic data and China being out for National Day holidays. But more to the point, with the US government shutdown dragging on, there is no major government data release for the FX majors to instil volatility. Still, global stock markets have continued to march higher with more an dore indices hitting new record highs almost on a daily basis, while at the same time precious metals have also kept going higher, with gold futures reaching $4,000 for the first time ever overnight. In the FX, the yen has slumped in response to the weekend election in Japan, while the French political turmoil has kept the euro undermined against some of her rival currencies.

 

Euro faces French political strain

 

The EUR/USD forecast has taken a bit of a hit this week amid the turmoil in French politics, though this hasn’t yet spilled over other European markets and the impact on the single currency has been mild.  The latest reports from Paris suggest outgoing Prime Minister Sebastien Lecornu has until Wednesday evening to form a government in a deeply divided parliament. Should he fail, the options may narrow to a technocratic government—or an early election. Still, the market seems to have priced in French political uncertainty as the developments haven’t had a major impact on the wider financial markets yet.

 

 

What about economic data?

 

With the US government shut, there are no official data releases scheduled. The market’s focus will turn to Fed speakers, including Bostic, Bowman, and Miran, who, in the absence of fresh labour market data, are unlikely to shift market expectations for two more rate cuts this year.

 

Unfortunately, the global macro calendar outside of the US has also been on the light side this week. From the Eurozone, we saw a surprise 0.8% drop in German factory orders for August this morning, which kept the euro under mild pressure.  Heading towards the second half of the week, the macro calendar from the Eurozone gets a bit quieter with German industrial production and Christine Lagarde’s speech (both Wednesday) likely to be the most important macro drivers for the EUR/USD forecast.

 

 

Technical EUR/USD forecast: technical analysis

 

 

The EUR/USD chart has found some technical support near 1.1650, where a bullish trend line connecting the lows from May and August come into play. But we haven’t had a lift off from here yet, and price action is starting to feel a tiny bit heavy. Without a clear catalyst from either side of the Atlantic, downside risks are building for the euro amid the French political turmoil. Yet, the downside should be limited in our view, as we are more bearish on the US dollar than on the single currency because of the simple fact that the Fed is easing policy while the ECB looks to be done.

 

Anyway, it is all range-bound price action so let’s not read too much into this week’s price action. The path of least resistance could turn mildly lower, though, if a couple of more supports levels were to break, including the 1.1650 level, with 1.1620 and 1.1560 being the next potential support levels to watch.

 

In terms of resistance, 1.1700 is the first line of defence now for the bears, while above that the 21-day exponential and a short-term bearish trend line will converge around 1.1725. Break that and the bullish EUR/USD forecast will be confirmed again.

 

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R