Eurozone PMI in Focus as Dollar Holds Strong | 21st August 2025

FX markets tread cautiously ahead of Eurozone PMI and FOMC minutes. EUR/USD holds near 1.1650 under dollar pressure, while GBP/USD slips toward 1.3400 on sticky UK inflation. USD/JPY steadies in the mid-147s, EUR/JPY consolidates near 171.70, and USD/CAD hovers at 1.3880 with oil gains offering little relief. Traders eye PMI prints and Fed signals for direction.
Moneta Markets | 7 hari yang lalu

Eurozone PMI Watch

The Euro takes center stage today as traders await key Eurozone PMI figures, with sentiment shifting ahead of the release. Despite the spotlight on European data, the US Dollar continues to hold firm, underpinned by safe-haven demand and anticipation of the upcoming FOMC minutes. This tug-of-war between Eurozone economic signals and the Dollar’s resilience is setting the tone across major currency pairs.

GBP/USD Forecast

Current Price and Context

GBP/USD has extended its losses for the third consecutive day, slipping roughly 0.3% and testing key moving averages as of today. The sell-off follows a hotter-than-expected UK inflation print, which pushed odds for a rate cut by the Bank of England below 50%. Attention now turns to upcoming PMI readings and the FOMC minutes for fresh directional cues.

Key Drivers

Geopolitical Risks: None currently prominent; focus is squarely on economic data and central bank sentiment.

US Economic Data: A stronger U.S. dollar and elevated inflation signals are keeping GBP under pressure.

FOMC Outlook: Bond markets and Fed rate expectations are shaping dollar strength, indirectly affecting the pound.

Trade Policy: No notable developments affecting pound flows today.

Monetary Policy: BoE rate-cut expectations have dropped amid sticky UK inflation, diminishing bullish GBP interest.

Technical Outlook

Trend: Modestly bearish — GBP/USD continues its pullback below critical technical levels.

Resistance: Immediate resistance around the 50-day EMA near 1.3450–1.3500.

Support: Next support zone lies near 1.3400 and potentially lower if bearish momentum accelerates.

Forecast: Expect consolidation within a 1.3400–1.3500 band ahead of PMI and U.S. data. A surprise reading could push the pound either way.

Sentiment and Catalysts

Market Sentiment: Cautiously negative — weakness is driven by persistent inflation and diminished BoE easing expectations.

Catalyst: Watch for the Eurozone and UK PMI releases, along with the FOMC minutes, to offer new direction.

 

 

USD/JPY Forecast

Current Price and Context

USD/JPY is climbing toward the mid-147.00s, but momentum is fragile amid mixed signals from the Bank of Japan (BoJ) and Federal Reserve. The pair lacks bullish conviction as markets digest Japanese rate divergence and await further clarity on central bank paths.

Key Drivers

Geopolitical Risks: Modest safe-haven demand supports the yen modestly, though dollar flows remain prevalent.

Monetary Policy: Diverging policy stances—BoJ appears cautious while markets increasingly expect a Fed rate cut—continue to exert directional pressure.

FOMC Outlook: Markets remain sensitive to indications of U.S. rate easing, while BoJ developments lack clarity.

Trade & Economic Data: No fresh trade or macro policies are influencing the pair today.

Technical Outlook

Trend: Neutral — a cautious upward drift amid limited conviction.

Resistance: Immediate barrier in the 147.50–148.00 area.

Support: Watch near the 146.50–147.00 zone for downside protection.

Forecast: Expect the pair to linger in a 146.80–147.50 range, with breakouts tied to major Fed or BoJ announcements.

Sentiment and Catalysts

Market Sentiment: Tentative — market moves likely to be reactionary amid central bank ambiguity.

Catalyst: Key drivers include upcoming BoJ commentary or policy shifts and clarity from Fed communications (e.g., Jackson Hole statements, FOMC signals).

 

 

EUR/JPY Forecast

Current Price and Context

EUR/JPY is holding steady above 171.50, trading around 171.70 during early Asian hours, as traders tread cautiously ahead of Eurozone PMI data releases from Germany and across the region. The Japanese yen remains under pressure amid ongoing uncertainty over the Bank of Japan’s policy outlook, while Eurozone activity indicators remain highly anticipated.

Key Drivers

Geopolitical Risks: Absent significant geopolitical tension today—moves are driven chiefly by economic data anticipation.

Monetary Policy: Uncertainty persists around the BoJ’s tightening trajectory, supporting weaker yen dynamics. Meanwhile, attention turns to ECB growth signals via PMI releases.

US & Fed Signals: A broadly firm dollar adds pressure on both EUR and JPY, though euro and yen dynamics reflect regional divergences.

Trade Policy: No immediate trade developments; traders remain focused on the upcoming PMI data.

Economic Data: Eurozone and German PMI figures are key; they will greatly influence near-term EUR sentiment relative to JPY.

Technical Outlook

Trend: Neutral—EUR/JPY is consolidating within a tight range ahead of data.

Resistance: Near-term resistance lies in the 172.00–172.20 zone.

Support: Support is anchored around the 171.50 psychological level.

Forecast: Range-bound trading between 171.50–172.20 is likely heading into PMI releases. A breakout on either side will depend on the data’s surprise from expectations.

Sentiment and Catalysts

Market Sentiment: Cautiously neutral—traders are holding positions and await proactive guidance from PMIs and central bank commentary.

Catalyst: Eurozone PMI numbers are the immediate movers—strong prints may boost EUR/JPY; weak data or BoJ hawkish cues may lift JPY.

 

 

EUR/USD Forecast

Current Price and Context

EUR/USD is holding losses near 1.1650, trading cautiously as markets await Eurozone PMI data. The pair faces pressure from a firm U.S. dollar, supported by hawkish undertones from the latest FOMC minutes, even as Eurozone inflation remains tame.

Key Drivers

Geopolitical & Economic Risks: While geopolitical risks are subdued, attention is squarely on economic data and central bank signals, particularly from the ECB and Fed.

Eurozone Data (PMIs): Upcoming Eurozone PMI reports are highly anticipated and could influence the magnitude and direction of EUR/USD movements.

Monetary Policy: Tighter Fed communication and a stronger U.S. dollar are weighing on the euro.

Trade Policy: No fresh trade developments influence the pair today.

Inflation: Eurozone HICP remains steady at 2.0%, aligning with projections, offering little fresh impetus for the euro.

Technical Outlook

Trend: Mildly bearish — the pair is under pressure and holding near key technical levels.

Resistance: Look for resistance around 1.1700–1.1720.

Support: Immediate support lies around 1.1620–1.1650; a breakdown could open the path lower.

Forecast: Expect limited range trading between 1.1620–1.1700 as markets await Eurozone PMI data. A positive surprise may lift the euro; a disappointing print could send it further into the red.

Sentiment and Catalysts

Market Sentiment: Cautiously bearish—traders are hesitant and await clearer directional cues.

Catalyst: The upcoming Eurozone PMI data remains the key catalyst; a strong print could provide temporary relief for the euro, while weaker readings may reinforce USD strength.

 

 

USD/CAD Forecast

Current Price and Context

USD/CAD remains under bullish control near the 1.3880 level—its highest since May 21—driven by a hawkish boost from the latest FOMC minutes and a dovish tilt from the Bank of Canada, which offsets modest oil price gains. Meanwhile, Reuters notes the Canadian dollar is steady near a three-month low, with USD/CAD recently touching 1.3883, near its weakest level since May 22. Tight resistance around 1.3880 is now a focal point for traders.

Key Drivers

Geopolitical Risks: Little direct influence today—currency moves are data and policy-driven.

US Economic Signals: FOMC minutes leaning hawkish continue to bolster dollar strength.

BoC Policy Outlook: A dovish stance from the Bank of Canada keeps the loonie under pressure.

Oil Prices: A modest uptick in crude provides limited support to CAD, but the broader direction remains influenced by central bank divergence.

Technical Outlook

Trend: Bullish — confirmed by a breakout above the 100-day SMA and cluster around 1.3800.

Resistance: Immediate resistance near 1.3900; a sustained break could target 1.3950 and psychological 1.4000.

Support: Near-term support lies around 1.3850–1.3855. A meaningful decline may find support near the 1.3800 mark or the 100-day SMA.

Forecast: The pair is likely to consolidate near 1.3880. A breakout above may pave the way to 1.3950–1.4000, while any major dip should offer buying opportunities near support levels.

Sentiment and Catalysts

Market Sentiment: Bullish — momentum favors dollar strength, with traders watching for breakout opportunities.

Catalyst: Key drivers include future BoC commentary, upcoming oil data, and central bank signals that may influence the trajectory of USD/CAD.

 

 

Wrap-up

As the market digests the Eurozone PMI and prepares for the FOMC minutes, volatility could rise in both EUR/USD and broader FX markets. Traders will be closely watching whether the Euro can find support from improving data or if the Dollar’s strength will keep it on the defensive. Staying alert to key releases and central bank cues will be crucial in navigating the next moves.

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