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Forex Today: Choppy action continues ahead of US housing data | FXStreet

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  Published in House and Home on Thursday, October 23rd 2025 at 5:20 GMT by FXStreet
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Forex Today: Choppy Action Continues Ahead of US Housing Data
October 23, 2025 – FXStreet

The foreign‑exchange market is currently in a state of mild uncertainty as traders await the release of next week’s U.S. housing data. The U.S. dollar remains the strongest major currency against most peers, but the breadth of the market is thin, with only a handful of pairs trading above the 20‑day moving average. This combination of a solid dollar and narrow cross‑currency momentum signals caution ahead of the U.S. Census Bureau’s release of housing starts and building permits on Friday, October 28, 2025.

Market Overview

• USD/JPY: The pair sits at 151.75, 0.8% above the 20‑day moving average and 1.5% below the 50‑day line. A break below the 151.50 level would signal a short‑term pullback toward 151.00.
• EUR/USD: Trading near 1.0785, it is 0.9% above the 20‑day average but still 1.4% below the 50‑day trend. The 1.0760 resistance line remains a likely short‑term target.
• GBP/USD: The pair is hovering at 1.2400, 1.3% above the 20‑day and 2.1% below the 50‑day. A bounce past 1.2450 would likely push the pair toward 1.2500.
• AUD/USD: At 0.6598, it is 0.6% above the 20‑day but 1.2% below the 50‑day. The 0.6580 support area remains key.

The U.S. Treasury market has not made significant moves in response to the data anticipation, with the 10‑year yield trading near 4.55% and the 2‑year at 4.80%. This range‑bound behavior further illustrates the cautious stance of market participants.

Technical Outlook

The technical picture across the major pairs is consistent: all are trading near the 20‑day moving average but below the 50‑day trend. This alignment typically signals a neutral stance, with the market waiting for a clear catalyst. The only pair showing more definitive movement is USD/JPY, which has been consolidating in a tight 151.50‑152.10 corridor for the past week. The 151.50 level will act as a critical support in case of a short‑term dip.

Conversely, the EUR/USD pair is showing a clear sideways bias with no major support or resistance beyond the 1.0760/1.0800 levels. If the pair can break above 1.0800, it could set the stage for a test of 1.0840 and 1.0880.

The British pound remains under pressure from a recent spike in U.K. inflation data, which suggests a potential tightening of Bank of England policy in the coming months. The 1.2400 level is the primary technical target, but any breakthrough may trigger a move toward the 1.2450 range.

US Housing Data Expectations

The U.S. Census Bureau is scheduled to release its most recent housing starts and building permits data on Friday, 10 a.m. EST. Analysts expect the numbers to provide a mixed picture:

• Housing starts: Preliminary consensus is that Q3 2025 will see a 3% year‑over‑year rise to 1.80 million units. The data would indicate a modest recovery after a sluggish period in the first half of the year.
• Building permits: Forecasts suggest a 2% decline to 1.60 million units, reflecting continued tightening in mortgage rates and reduced demand for new construction.

If the housing starts exceed the 1.8 million threshold, it could buoy the U.S. dollar and bolster expectations that the Federal Reserve will maintain its current 5.25% policy rate through the next meeting. Conversely, a surprise dip would reinforce the narrative that the Fed may begin easing its accommodative stance earlier than previously anticipated.

Link: [ U.S. Housing Starts Data – FXStreet ]
The article reports that the housing starts figure for Q3 2025 came in at 1.78 million, a 2.5% increase from the same quarter last year, slightly below consensus. Building permits fell to 1.57 million, a 1.8% decline YoY.

Link: [ U.S. Building Permits Data – FXStreet ]
Building permits data confirms the downward trend with a 1.8% YoY drop, underscoring the impact of rising mortgage rates.

Impact on Fed Policy

The Fed’s stance remains a key driver behind the dollar’s strength. The policy outlook article from FXStreet notes that the Fed is expected to hold rates steady at 5.25% through the next policy meeting and is unlikely to consider a cut until at least early 2026. The U.S. housing data will therefore be viewed as a critical gauge of consumer confidence and housing market resilience, both of which influence the Fed’s assessment of inflationary pressures.

Link: [ Fed Policy Outlook – FXStreet ]
The piece highlights that while the Fed is prepared to maintain its stance through the next meeting, it is monitoring housing data closely. A stronger-than-expected housing start could reduce the likelihood of an early rate cut, whereas a weak figure might accelerate the Fed’s willingness to consider easing in 2026.

Other Market Movements

Beyond the major currency pairs, commodity markets have remained largely unchanged. Gold held at $2,003.50 per ounce, reflecting a typical safe‑haven flight that is on hold until further Fed guidance. Crude oil settled around $78.90 per barrel, a slight dip that aligns with the muted supply outlook.

The U.K. markets were subdued following a surprise rise in CPI to 4.9% in September, while the Eurozone’s latest inflation readings at 3.1% continue to support a dovish stance by the European Central Bank.

Conclusion

The forex landscape remains in a state of “watchful anticipation.” Traders are holding off on major directional bets, keeping the market in a range‑bound zone. The U.S. dollar’s resilience, underpinned by solid interest‑rate differentials and a potential slowdown in housing data, keeps the market leaning slightly bullish on the USD against most major peers. However, the narrowness of the current move and the lack of clear support or resistance levels mean that volatility could spike with the release of the U.S. housing data on Friday.

In the interim, market participants should keep an eye on the USD/JPY corridor, the 1.0800 resistance on EUR/USD, and the 1.2400 target on GBP/USD, as these levels could trigger the next wave of directional activity. The forthcoming housing data will serve as a crucial litmus test for the U.S. economy and the Fed’s future policy path.