Forex Fundamental Analysis Forecast 2025
Quick Summary
*Please note that the analysis is based on fundamentals as of early 2025. Fundamentals can change quickly.
AUD (The Australian Dollar)
Inflation is now within the RBA target of 2-3%. However, rates have not yet started coming down. Australia's Economic indicators look positive, suggesting little need to start cutting rates. Significant weakness can be expected if the Australian economy goes through a downturn, which could usher in a rate-cutting cycle. If Australia's economy remains okay, expect rates to stay higher for longer.
AUD Outlook: Buy whilst economic indicators remain positive. Sell if the economy takes a downturn.
CAD (The Canadian Dollar)
The Canadian dollar weakened in 2024, and this could continue. Despite rate cuts, rising unemployment and below-target GDP growth could further weaken the CAD. However, if the economy settles, this could signal the end of the rate-cutting cycle, meaning the downside momentum may end.
CAD Outlook: Further downside expected. If the economy settles, the selling momentum could also settle.
CHF (The Swiss Franc)
The Swiss Franc is always difficult to forecast due to its safe-haven status. From a carry trade point of view, it is a definite sell. However, the Swiss economy is currently performing well, and inflation is within targets, signalling that rate cuts are over and could be steady throughout 2025. Also, any global tensions may cause the CHF to strengthen further.
CHF Outlook: Indecisive. Possible buy.
EUR (The Euro)
Inflation is rising again, suggesting that the ECB may stop cutting rates. With mixed economic indicators and no attractive carry trade opportunity, the EUR may be sideways throughout 2025. However, the Euro Area may have a poor-performing economy and rising inflation - a recipe for disaster and potential recession.
EUR Outlook: Indecisive.
GBP (The Great British Pound)
The UK is in a pickle. Inflation is rising again, but economic indicators are weak, meaning rate hikes to bring down inflation are unlikely. The UK (along with Europe) could be in a high-inflation, poor-performing economic situation. However, the BOE has kept rates relatively high, making the GBP more attractive than other poor-performing economies.
GBP Outlook: Indecisive. Possible buy due to higher for longer interest rates.
JPY (The Japanese Yen)
Could 2025 be the year of the yen? I thought so in 2024, but the weakness has continued. However, the BOJ has started hiking rates, and the Japanese economy is looking more positive than it was, signalling possible further rate hikes. The negative swap rate will put off potential JPY bulls, so don't expect drastic yen moves. Unless the BOJ take unexpected action, such as giant rate hikes or intervention, both are not off the cards.
JPY Outlook: Buy. Based on the current data, the BOJ will continue to increase rates throughout 2025.
NZD (The New Zealand Dollar)
Poor New Zealand. Inflation is at its target, but the economy is suffering. Rising unemployment, negative GDP growth (recession), and poor retail sales paint a sorry picture for NZD. Further rate cuts may help to stimulate the economy.
NZD Outlook: Sell.
USD (The US Dollar)
The US economy continues to be robust and outperform. Inflation has started rising again, signalling that rates may stay higher for longer. The dollar was an obvious buy for me during the second half of 2024, which reaped dividends. I will continue to be a USD bull.
USD Outlook: Buy.
Forex Technical Analysis Forecast 2025
Based on the fundamental analysis above, my Forex Forecast using technical analysis is below.
AUDCAD
Direction: Bullish
Notes: AUDCAD is currently indecisive on higher and bearish on lower timeframes. Buying opportunities could exist around the key monthly support at 0.8600 and if price moves above the weekly moving averages. Upside momentum may stall around the 0.9450 weekly resistance and monthly diagonal resistance.
AUDJPY
Direction: Bearish
Notes: AUDJPY is up-trending. Opportunities to go short may exist around the weekly and monthly moving averages, the monthly resistance levels at 102.00 and 108.00, and if price moves below the weekly trend support. AUDJPY could find support around 86.00.
AUDNZD
Direction: Bullish Notes: Long opportunities could exist around the daily, weekly and monthly moving averages, the weekly support at 1.1000, the weekly trend support area, and the monthly support at 1.0200. Key monthly resistance is at 1.1450.
CADCHF
Direction: Bearish
Notes: Price is down-trending within a weekly bearish channel. Selling opportunities could exist around the channel resistance area, the weekly resistance around 0.6700, and the key monthly resistance at 0.6800. Selling opportunities may also exist around daily, weekly, and monthly moving averages.
CADJPY
Direction: Bearish
Notes: CADJPY has been up-trending on the weekly timeframe. However, price action may be forming a head-and-shoulders trend reversal pattern. Shorting opportunities could exist around the potential second shoulder, around daily and weekly moving averages, around the weekly resistance at 118.00 and if CADJPY moves below the weekly trend support area and the key monthly support at 104.00.
EURCAD
Direction: Bullish
Notes: Buying opportunities could exist around the weekly bullish channel support areas, the daily, weekly and monthly moving averages, and the key monthly support at 1.3100. Bullish moves may stall around the bullish channel resistance areas, and the monthly resistance at 1.5900.
EURJPY
Direction: Bearish
Notes: EURJPY has been up-trending. However, price action could be forming a head-and-shoulders trend reversal pattern. Opportunities to go short may exist around the second shoulder of the pattern, the monthly resistance at 168.50, the weekly resistance at 174.00, and the weekly and monthly moving averages. A bearish move could find support around 148.00.
EURUSD
Direction: Bearish
Notes: Shorting opportunities could exist around weekly and monthly moving averages and the weekly levels at 1.0500, 1.1250, and 1.2250. Price may find support around 0.9700.
GBPNZD
Direction: Bullish
Notes: Price is up-trending. Buying opportunities may exist around the weekly and monthly trend support areas, the daily, weekly, and monthly moving averages, and the weekly support levels at 2.0500 and 2.1500. A key monthly resistance is at 2.4200.
NZDCHF
Direction: Bearish
Notes: NZDCHF is down-trending within a weekly bearish channel. Shorting opportunities could exist around the daily, weekly, and monthly moving averages, the weekly bearish channel resistance area, the weekly resistance at 0.5600 and the monthly resistance at 0.5700.
NZDJPY
Direction: Bearish
Notes: Price was up-trending, but NZDJPY recently swung below key weekly trend support. Selling opportunities may exist around weekly and monthly moving averages, the monthly resistance levels at 93.50 and 98.00, and the previous trend support as resistance. Downside momentum could stall around 75.00 and 83.00.
NZDUSD
Direction: Bearish
Notes: NZDUSD is down-trending. The downside could continue. However, price may form a bullish correction move first. Shorting opportunities may exist around the daily, weekly, and monthly moving averages, the monthly diagonal resistance area, and the weekly resistance levels at 0.5800, 0.6400, and 0.6500.
USDCAD
Direction: Bullish
Notes: USDCAD is clearly up-trending. The uptrend may continue. However, a bearish correction move could form first. Long opportunities may exist around the weekly and monthly moving averages and the weekly and monthly levels at 1.4100, 1.3900, and 1.3150.
USDCHF
Direction: Bullish
Notes: Price is consolidating and a weekly horizontal channel has been formed. Buying opportunities could exist around the consolidation support area, the weekly moving averages, the monthly level at 0.8750, and if USDCHF moves above the weekly horizontal channel. Price may find resistance around the monthly moving averages and the levels at 1.0050 and 1.0300.
The Best Forex Trading Opportunities 2025
Below are some further trading opportunities that could be presented in the coming year.
The Best Trading Opportunities in 2025
AUDNZD
Direction: Bullish
Notes: Long opportunities could exist around the daily, weekly, and monthly moving averages, the weekly support at 1.1000, the weekly trend support area, and the monthly support at 1.0200. Key monthly resistance is at 1.1450.
CADJPY
Direction: Bearish
Notes: CADJPY has been up-trending on the weekly timeframe. However, price action may be forming a head-and-shoulders trend reversal pattern. Shorting opportunities could exist around the potential second shoulder, around daily and weekly moving averages, around the weekly resistance at 118.00 and if CADJPY moves below the weekly trend support area and the key monthly support at 104.00.
EURJPY
Direction: Bearish
Notes: EURJPY has been up-trending. However, price action could be forming a head-and-shoulders trend reversal pattern. Opportunities to go short may exist around the second shoulder of the pattern, the monthly resistance at 168.50, the weekly resistance at 174.00, and the weekly and monthly moving averages. A bearish move could find support around 148.00.
GBPNZD
Direction: Bullish
Notes: Price is up-trending. Buying opportunities may exist around the weekly and monthly trend support areas, the daily, weekly, and monthly moving averages, and the weekly support levels at 2.0500 and 2.1500. A key monthly resistance is at 2.4200.
NZDJPY
Direction: Bearish
Notes: Price was up-trending, but NZDJPY recently swung below key weekly trend support. Selling opportunities may exist around weekly and monthly moving averages, the monthly resistance levels at 93.50 and 98.00, and the previous trend support as resistance. Downside momentum could stall around 75.00 and 83.00.
USDCAD
Direction: Bullish
Notes: USDCAD is clearly up-trending. The uptrend may continue. However, a bearish correction move could form first. Long opportunities may exist around the weekly and monthly moving averages and the weekly and monthly levels at 1.4100, 1.3900, and 1.3150.
Wild Card Opportunities
CADNOK
Notes: A break of the clear symmetrical triangle could form a large weekly move either way, depending on the direction of the break.
Buy the Lira?
If Turkey's inflation continues to fall, we could see TRY strength. The carry trade is extremely attractive. However, there must be a shift in fundamentals first, specifically, inflation falling to an acceptable level.
*There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Samuel Morton, Actual Forex Trading, SM Web Capital, and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice.
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