Forex Market Analysis: Dollar strength weighs on euro and sterling as Asian pairs diverge
EUR/USD and GBP/USD remain in clear short-term downtrends, trading below their 20-day and 50-day averages after another weak week. USD/JPY is holding above its 20-day average with a rising sequence of recent closes, while USD/INR remains above both major averages. Sterling and US dollar events, including BOE Governor Bailey’s speech and several US releases, could increase intraday volatility.
What to watch today
- EUR/USD: 1.1362 support, 1.1381 pivot and 1.1401 resistance.
- GBP/USD: 1.3210 recent low and BOE Governor Bailey at 13:15 UAE.
- USD/JPY: 158.35 pivot, 158.91 resistance and 159.55 resistance.
- USD/INR: 95.69 pivot and the 96.12-96.13 resistance area.
- US events: Durable Goods at 16:30 UAE and revised sentiment data at 18:00 UAE.
Technical analysis
EUR/USD
Bearish 1.1382 0.00% liveEUR/USD is in a sustained bearish trend below its SMA20 and SMA50, with price close to the lower end of its 20-day range.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
EUR/USD closed at 1.1373, below the pivot at 1.1381 and beneath both the 20-day average at 1.1545 and the 50-day average at 1.1538. The last 10 closes show a persistent decline, while the pair is only slightly above its 20-day low at 1.1360 and 60-day low at 1.1354.
The 14-day RSI, a momentum gauge, is 24.6, which indicates heavily oversold conditions. That can allow a short-term rebound, but it does not by itself reverse the broader bearish structure. The average true range, or ATR, is 0.0052, so daily moves remain material relative to the current price.
Holding above 1.1362 could keep the pair near its recent lows while attention remains on 1.1381 and 1.1401. A sustained move below 1.1362 would place the 1.1341 support level in focus.
GBP/USD
Bearish 1.3222 -0.15% liveGBP/USD remains bearish below its SMA20 and SMA50, sitting at its 20-day low after a sequence of declining closes.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
GBP/USD closed at 1.3212, below the pivot at 1.3236 and beneath the 20-day average at 1.3454 and the 50-day average at 1.3472. The pair is at its 20-day low of 1.3210 and its 60-day low, while the last 10 closes show a broad downward sequence.
The 14-day RSI is 24.7, placing momentum in oversold territory. This may leave room for short-lived recovery attempts, but the trend remains weak while price stays below the moving averages. ATR is 0.0069, signalling a relatively wide typical daily range and a need for volatility-aware risk controls.
The first nearby levels are 1.3217 and 1.3236 on the upside, with 1.3210 and 1.3192 below. BOE Governor Bailey’s speech is the main scheduled sterling event and may affect volatility around the European session.
USD/JPY
Bullish 158.17 -0.06% liveUSD/JPY has a rising short-term sequence above its SMA20, although it remains below the SMA50 and within a wider 20-day range.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
USD/JPY closed at 158.42, just above the pivot at 158.35 and above the 20-day average at 156.50. The last 10 closes have climbed from 153.42 to 158.42, supporting a firmer short-term structure. However, price remains below the 50-day average at 158.70, so the broader trend is not fully aligned.
The 14-day RSI is 57.2, a neutral-to-firm reading rather than an overbought condition. The pair’s 20-day high is 160.38, while ATR is 1.41, meaning intraday and daily fluctuations can be substantial.
Holding above 158.35 keeps the nearby 158.91 resistance in focus, followed by 159.55. A move back below the pivot would weaken the immediate structure and bring 157.71 into view.
USD/INR
Bullish 95.88 +0.14% liveUSD/INR is holding a modest bullish bias above its SMA20 and SMA50, with price near the upper part of its recent range.
Daily candles, last 90 sessions. Green dashed = support, red dashed = resistance.
USD/INR closed at 95.96, above the pivot at 95.69, the 20-day average at 95.34 and the 50-day average at 95.52. The pair has gained over one day, five days and 20 days, although the recent closes show consolidation near the upper end of the range rather than a steep directional move.
The 14-day RSI is 56.0, indicating moderately positive momentum without an overbought reading. ATR is 0.62, so movements around the 20-day high at 96.13 and the 60-day high at 96.90 may be uneven.
Holding above 95.69 would preserve the current constructive structure, with 96.12 and 96.13 forming a closely grouped resistance area. A move below the pivot would shift attention toward 95.31.
Market events (next 48 hours)
| Time (UAE) | Currency | Event | Impact | Forecast | Previous |
|---|---|---|---|---|---|
| Fri 25 Sep, 03:55 UAE | USD | President Trump Speaks | Medium | - | - |
| Fri 25 Sep, 13:15 UAE | GBP | BOE Gov Bailey Speaks | High | - | - |
| Fri 25 Sep, 13:15 UAE | USD | FOMC Member Williams Speaks | Low | - | - |
| Fri 25 Sep, 16:30 UAE | USD | Core Durable Goods Orders m/m | Low | 0.6% | 0.4% |
| Fri 25 Sep, 16:30 UAE | USD | Durable Goods Orders m/m | Low | -0.3% | 1.1% |
| Fri 25 Sep, 17:20 UAE | USD | FOMC Member Schmid Speaks | Low | - | - |
| Fri 25 Sep, 18:00 UAE | USD | Revised UoM Consumer Sentiment | Medium | 47.4 | 47.8 |
| Fri 25 Sep, 18:00 UAE | USD | Revised UoM Inflation Expectations | Medium | - | 4.6% |
| Fri 25 Sep, 22:00 UAE | USD | FOMC Member Hammack Speaks | Low | - | - |
The main event for sterling is BOE Governor Bailey’s speech at 13:15 UAE. With GBP/USD already near its recent lows, changes in interest-rate or economic commentary could produce a sharp reaction in the pair.
Several US events follow: Core Durable Goods Orders and Durable Goods Orders at 16:30 UAE, FOMC Member Schmid’s speech at 17:20 UAE, and the revised University of Michigan sentiment and inflation expectations figures at 18:00 UAE. These may affect the US dollar, particularly if the releases differ from the stated forecasts of 0.6%, -0.3% and 47.4 where applicable.
Further US Federal Reserve commentary from FOMC Member Hammack at 22:00 UAE may also influence dollar volatility. The earlier President Trump speech at 03:55 UAE and FOMC Member Williams’ speech at 13:15 UAE are additional scheduled events to monitor. Markets typically react through currency volatility and changes in short-term momentum, so moves around release times may be less orderly.
Algo insight: how a rules-based system treats today
A rules-based algorithm would distinguish the strong bearish structures in EUR/USD and GBP/USD from the firmer conditions in USD/JPY and USD/INR, rather than applying one directional rule across all pairs. EUR/USD and GBP/USD have low RSI readings, so an algorithm may require confirmation before treating continued weakness as a fresh trend signal.
ATR measures typical price movement and can help set volatility-aware stop distances and position sizes. Current ATR readings are 0.0052 for EUR/USD, 0.0069 for GBP/USD, 1.41 for USD/JPY and 0.62 for USD/INR. Higher ATR generally calls for smaller exposure or wider protective distances within a predefined risk limit.
A systematic approach may avoid opening or changing positions immediately around the 13:15 UAE BOE speech, the 16:30 UAE US releases and the 18:00 UAE sentiment figures. It may instead wait for spreads and price movement to stabilise, while evaluating European, US and Asian session behaviour separately.
