Major FX Pairs Face Historic Volatility Week Amid Key Risk Events

Forex markets are bracing for extreme volatility this week with multiple high-impact events scheduled across major currency pairs. The US Dollar Index (DXY) is consolidating near 104.50 ahead of the Federal Reserve's policy decision on Wednesday, where markets are pricing in a 70% probability of a 25-basis point rate hike. EUR/USD trades at 1.0820, with the European Central Bank meeting on Thursday potentially delivering another 50bp increase. GBP/USD hovers around 1.2650 as UK inflation data is expected to show continued pressure. JPY pairs remain volatile with USD/JPY testing 150.00 resistance amid Bank of Japan speculation. Technical indicators suggest heightened volatility with major pairs approaching key psychological levels. Traders should prepare for significant price swings and potential breakouts as central bank decisions could reshape the forex landscape for the remainder of Q3 2025.