EUR/USD Forecast: Currency Pair of the Week – March 24, 2025
By: Fawad Razaqzada, Market Analyst – March 24, 2025
The latest forecast for the EUR/USD shows bullish signs heading into the week, primarily fueled by Germany’s historic fiscal expansion approved last week.
Key Points
- Germany’s €500 billion spending package marks a shift in fiscal policy.
- US Dollar steadies despite mixed signals from inflation data.
- Critical economic data awaited this week from the US Core PCE Index.
The Euro started the week on shaky ground, but the overall sentiment remains bullish. The market is reacting to the Federal Reserve’s recent dovish stance amidst signs of mixed inflation. Today’s industry data presented a mixed bag; however, the underlying momentum for the euro remains strong.
Week Ahead: Will Data Drive EUR/USD Higher?
After mixed global PMI reports, this week will be essential for the EUR/USD direction. The US services PMI showing strength lends support to the dollar, yet euro sentiment could hold following Germany’s robust spending strategy.
Germany’s Fiscal Revolution Bolsters EUR/USD
Germany's unprecedented fiscal shift aims to reinvigorate its economy with substantial infrastructure and defense spending. Analysts suggest this could lead to both GDP growth and increased inflation, further supporting the EUR/USD bullish outlook.
Technical Analysis: Potential Rally Ahead
The technical picture shows EUR/USD consolidating at the 1.08 mark. Bulls will need to defend this area to maintain upward momentum, making it critical for focus in upcoming sessions. Key support levels are at 1.0730 and resistance at 1.0900 and 1.1000.
Summary
The EUR/USD pair remains positioned for potential strength this week as we look ahead to significant economic data. Market participants should keep an eye on developments in the US Core PCE Index as its outcome may decisively steer the currency pair’s near-term direction.
Opinion & Analysis
In my view, the bullish forecast for EUR/USD is supported by solid fundamentals and shifting market sentiment. With Germany’s spending plans potentially acting as a catalyst, traders should also prepare for volatility ahead of key economic data releases.