Top 3 Forex Pairs to Watch This Week
As global markets absorb fresh economic data and central banks steer policy expectations, forex traders should keep a close eye on several key currency pairs that look poised for directional moves. Below are the top 3 forex pairs that could offer interesting setups this week — along with what to watch, key levels, and risk factors.
1. EUR / USD
Why it matters
The EUR/USD continues to dominate the forex space due to its liquidity and sensitivity to U.S. versus Eurozone macro data. It often leads broader dollar trends.
What to watch
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U.S. inflation (CPI/PPI) and non-farm payrolls data
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Eurozone consumer confidence, industrial production, and ECB commentary
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Risk sentiment (stock markets, safe-haven flows)
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Interest rate expectations: any hawkish pivot by the ECB or dovish surprise from the Fed could tip the balance
Key levels
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Resistance: ~1.1850 – 1.1900
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Support: ~1.1700 – 1.1650
Outlook
The pair may remain rangebound early in the week, but any surprise in U.S. inflation or Eurozone data could trigger a breakout. A weaker-than-expected U.S. inflation reading might weigh on the dollar, giving the euro some room to rally. Conversely, stronger U.S. data or hawkish Fed rhetoric could drag EUR/USD lower.
2. USD / JPY
Why it matters
USD/JPY is often a barometer for global risk appetite, capital flows, and interest rate differentials between the U.S. and Japan. It’s also one of the most traded and monitored cross-pairs.
What to watch
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U.S. interest rate signals and Treasuries yields
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Japanese BOJ comments and yield curve control policy
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Global risk trends — in risk-off environments, JPY often strengthens
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U.S. economic surprises, especially data tied to consumer spending and labor
Key levels
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Resistance: ~150.50 – 151.50
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Support: ~147.50 – 146.50
Outlook
If U.S. yields continue to rise, USD/JPY might test higher levels, but intervention risk or BOJ jawboning could cap upside. A shift toward risk aversion may lead traders to seek JPY, driving USD/JPY downward.
3. GBP / USD (“Cable”)
Why it matters
GBP/USD is highly sensitive to developments in both the U.K. and U.S., including inflation trends, BoE expectations, and fiscal policy shifts. It often sees strong oscillations around major data releases.
What to watch
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U.K. inflation, retail sales, GDP, and BoE communications
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U.S. inflation, Fed commentary, and labor data
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Geopolitical developments or trade news affecting either side
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Crossflows or spillovers from EUR/USD moves
Key levels
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Resistance: ~1.3800 – 1.3900
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Support: ~1.3550 – 1.3450
Outlook
Cable might be volatile this week. If the Fed signals further tightening and the BoE remains dovish, GBP could weaken. But any surprise from the U.K. side (e.g., stronger-than-expected inflation or hawkish hints from the BoE) could reshape the narrative.
Risk Factors & Strategy Tips
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Event risk: Major announcements — such as inflation reports, employment data, central bank speeches — can trigger sharp moves.
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Volatility spikes: Use appropriate position sizing and watch for intraday volatility.
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Correlation effects: Moves in EUR/USD often influence GBP/USD and cross-pairs; USD/JPY is more sensitive to global sentiment.
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Stop-loss discipline: Always define your risk levels before entering.
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Confirm with confluence: Use technical analysis (trendlines, support/resistance) + fundamentals to filter trades.
