Five currency pairs you should be watching in August 2025 and why

After a very volatile July trading session, forex markets enter August with a heightened focus on central bank policy divergence and evolving global dynamics, with the latest round of US trade deals.
We enter the month with no Federal Reserve, ECB, or Bank of Canada meetings, allowing regular geopolitics and seasonal flows to move the US dollar and currency markets.

One event not to forget, however, is the Jackson Hole Economic Symposium, which will take place between the 21st and 23rd of August. All central bank heads tend to make back-to-back speeches, which can significantly impact future currency outlooks.

Also, traders should not forget to look back at August 2024, which got off to a flying start. A significant carry trade unwinding began, and the first part of the Israel-Iran conflict shook markets.

Anyways, central bank meetings are far from the only catalysts that move forex currencies, therefore it is essential to track the latest news and technical levels to gain an edge on the ongoing action.

To prepare for the upcoming month, here are the five currency pairs to watch as August unfolds.

Commodities heavily influence the New Zealand and Canadian dollars, as both nations are significant exporters. The NZD tends to react more to moves in agricultural products, particularly dairy, meat, and wood, given New Zealand's strong reliance on these exports. The CAD remains closely tied to oil and natural gas price fluctuations, reflecting Canada's abundant energy resources.

Beyond commodities, the currencies are driven by their respective economic ties: Canada is closely linked to trends in the US, its largest trading partner, with substantial integration in industries like automotive manufacturing. New Zealand is more sensitive to developments in Asia-Pacific economies, especially China and Australia, which are its major trading partners. In the absence of fresh geopolitical shocks, traders focus on central bank policy divergence and incoming economic data.

On that front, the Bank of Canada recently paused its rate-cutting cycle at its meeting on June 4, 2025, holding its policy rate at 2.75% – and in the waiting of further data from tariffs, the Bank of Canada has paused again at their July 30th rate decision. This follows a series of cuts that began in June 2024.

Meanwhile, the Reserve Bank of New Zealand (RBNZ) is still in its cutting cycle, which started when it reduced its main rate (the Official cash rate) from 5.5% to 3.25% in a series of 25-bps cuts. The RBNZ kept it unchanged at the meeting earlier this month. The New Zealand central bank has signaled that more cuts may follow, citing a lower inflation outlook and global trade risks.

As rates from both nations are expected to converge, the price action stays mostly range-bound, allowing for spotting some decent setups in a not-too-volatile pair.

The pair has been evolving in a 2-handle range since prices recovered from the Liberation Day volatility, between the highs of the range located between 0.83 to 0.8350 and the lows between 0.8130 to 0.8175 – July lows wicked just below at 0.8110.

Looking even further back, the pair has maintained a solid range. Prices have been resiliently staying within a 0.80 to 0.84 range since July 2023, with a few exceptions.

The resilience of the range is shown from the same swift return to the mean as prices try to break out unsuccessfully – the latest example of such is the Liberation Day trough.

A key to trading the pair will be to spot if there are any signs of breakouts in the pair or a lack thereof.

After a year-long consolidation in a 10-handle range, end-June positive sentiment and trough in the US dollar had brought back euro strength, leaving the yen struggling.

The pair has actually recently passed above the 169.70 2008 highs and any reactions will now be closely watched by traders – the ongoing price action is a tight bull weekly channel. This technical pattern is by definition holding as long as no weekly candle closes below the precedent.

In terms of fundamentals, the ECB has just published its decision on Thursday, 24th of July, to leave rates unchanged – their deposit facility rate is staying at 2% for now.
Markets are still trying to price in a Bank of Japan interest rate hike, with the absence of such having been considered as a sign of weakness for the yen in the past few months.

Prices are gradually approaching the last year's 175.40 highs, which may attract trend-traders and mean-reverters.

EUR/JPY Key resistance levels:

• 173.00 to 175.00 main weekly resistance
• 175.40 July 2024 highs

EUR/JPY Key support levels:

• 165.00 to 166.00 high of the year-long range
• 155.50 to 156.50 low of the year-long range

The Australian dollar is coming off several weeks of strength, buoyed by broad market optimism and fading tariff concerns that have lifted global growth sentiment—typically a supportive backdrop for the AUD and other commodity-linked currencies.
The pair recently hit some 8-month highs.

Australia’s economy remains resilient, with the unemployment rate holding near 4.3%. However, the Reserve Bank of Australia (RBA) expects the number to gradually rise toward year-end, adding to the case for further monetary easing. Domestic factors don’t uniquely drive moves in AUDUSD.

Keep an eye on the US dollar, which has been rebounding lately, and China’s economic trajectory. Any slowdown from the Middle Kingdom—Australia’s top trading partner—could weigh on the Aussie, though current data doesn’t yet reflect such weakness.

AUD/USD Key resistance levels:

• 2025 current highs - 0.6625
• 0.6580 to 0.66 resistance

AUD/USD Key support levels:

• 0.6540 low of channel
• 0.6480 to 0.65 support
• 0.6450 July lows

The ongoing trend in CHF/JPY has been one of the most important developments in forex.

This pair shows the relative strength of the two currencies that are typically considered as safe-haven currencies. With the previous quarters of strength in the CHF combined with a lack of hawkish communication from the Bank of Japan, the pair is attaining record highs.

The has been some profit-taking in the Swiss franc towards the end of July, and the JPY is still looking for bullish catalysts.

In an ever-more complex geopolitical landscape, appetite for safe-havens amid portfolio diversification is essential to watch – monitoring this pair can provide traders with interesting trends and a greater understanding of the ongoing market dynamics.

CHF/JPY Key resistance levels:

• 185.70 current highs (subject to change due to ongoing trading)
• 190.00 psychological level (potential resistance)
• Potential resistance at yearly channel highs 192.00 to 194.00

CHF/JPY Key support levels:

• 177.00 to 180.00 pivot zone
• 170.00 to 173.00 breakout level
• February 2025 low support 165.00

The pound-Canadian dollar pair is a historically volatile one.

After hitting lows of 1.40 during the 2022 hike cycle (and a significant run on the UK Gilts), GBP/CAD has been trending higher consistently towards the most recent 1.8840 highs, equal to the June 2016 top – a 30% rise from the low to highs.

In terms of monetary policy, the UK has been having a tougher time dealing with its high inflation, but the Bank of England is expected to cut at the upcoming August 7 meeting.¹

The Bank of Canada has held rates at 2.75% for the past three meetings and no cuts are priced for the rest of the year as economic activity is getting stronger.

With the US dollar strengthening from the end of July, it will be interesting to see if there is newfound strength for the CAD as forex flows have been moving more geographically throughout 2025.

GBP/CAD Key resistance levels:

• 1.8540 50-day moving average
• 1.8550 to 1.86 immediate resistance
• June 2016 high main resistance 1.88 to 1.90

GBP/CAD Key support levels:

• 1.83 to 1.8350 immediate support
• 1.76 to 1.78 2017 pivot turned support
• 2025 lows 1.75 region

Footnotes:

¹https://www.reuters.com/world/uk/bank-england-set-split-again-face-inflation-job-risks-2025-07-31/