Five forex pairs you should be watching in July 2025 and why

We are already entering the second half of 2025, and this year has been one of the most volatile in forex markets since Covid.

Markets are just turning the page on tariffs and the most recent Israel-Iran conflict, with yearly trends resuming, like the US Dollar returning to its swing lows.

Many central banks are now taking a break before potentially shifting their monetary stance later in the month. The Federal Reserve, for example, won’t be making its next move until the July 30th Rate Decision. This creates more space for economic data and market flows to drive short-term direction.

As traders gear up for the year's second half, here is a list of the 5 currency pairs to watch for the upcoming month.

USDJPY has been range-bound between 142.30 and 146.29 since mid-May, following a five-month downtrend.

Volatility within the range has remained elevated, driven by geopolitical developments and key data releases impacting multiple asset classes.

After a brief show of strength during the peak of the Israel-Iran conflict, the U.S. Dollar resumed its broader decline against most major currencies.

The post-war reversal continued after Fed Chair Powell’s most recent testimony at the US Congress, in which he offered no fresh signals regarding a rate cut at the upcoming July 30 FOMC meeting—a message that markets are watching closely.

The absence of new dovish guidance was interpreted as continuing the current policy stance, prompting traders to resume the prevailing bearish trend on the Greenback. However, the absence of changes in monetary policy for both the Federal Reserve and the Bank of Japan still points towards range-bound action until further news.

USD/JPY Key resistance levels:

• 146.00 Main Resistance Zone
• 150.00 to 152.00 Upper Resistance

USD/JPY Key Support levels:

• 142.00 Main Daily Support
• 2025 Lows Support Zone – 139.50 to 140.00

Commodities play a key role in driving both the Australian and Canadian dollars, as each country is a major exporter. The AUD is especially responsive to industrial metals—particularly copper—while the CAD tends to follow oil price movements.

Beyond commodity dynamics, the two currencies reflect their respective economic linkages: Canada is closely aligned with trends in the U.S., whereas Australia is more exposed to developments in China. In the absence of fresh geopolitical shocks, traders focus on central bank policy divergence and upcoming economic data.

On that front, the Bank of Canada paused its rate-cutting cycle at its last meeting after beginning it in June 2024. Markets broadly expect another hold, especially after a sharp +0.6% month-over-month inflation surprise, reinforcing the BoC’s wait-and-see stance.

Meanwhile, the Reserve Bank of Australia began easing in May 2025 with a 25 basis point cut and signalled further cuts could be on the horizon. This dynamic adds a bearish tilt to AUDCAD, though overall sentiment remains cautious, particularly in North America, where the full impact of recent tariffs is still uncertain.

Key resistance levels:

• 2024 Swing Highs – 0.9220 to 0.93
• 2025 daily resistance – 0.9050 to 0.91

Key support levels:

• Immediate support – 0.8850 to 0.8885
• Main daily support – 0.8750 to 0.88

Poland has emerged as one of the fastest-developing economies in recent years, with its GDP per capita rapidly converging toward Japan’s, for example. The Eastern European nation is increasingly becoming a hub for firms looking to expand, thanks to its business-friendly environment, particularly in contrast to the higher tax burdens and bureaucratic hurdles still prevalent in much of Western Europe.

In contrast, the United Kingdom has faced more challenges in boosting productivity. Persistent inflation and signs of slowing economic momentum have weighed on growth. Over eight years since its departure from the European Union, the UK is gradually rebuilding key trade relationships, most notably through the US-UK Trade Deal.

On the monetary front, the Bank of England has recently started its rate-cutting cycle, potentially creating headwinds for the British pound. Meanwhile, Poland’s recent election of a far-right government focused on further liberalizing the economy could strengthen the Zloty, reinforcing its bullish momentum.

GBP/PLN Key resistance levels:

• Daily Resistance – 5.10 to 5.1250
• End 2024 Highs 5.25 to 5.26

GBP/PLN Key support levels:

• 2025 Support Zone 4.92 to 4.95
• 2024 Major Support Zone – 4.98 to 5.00

One of the key themes in this year’s Forex market has been the Euro’s underlying strength. The single currency has benefited from a more unified European Union, particularly in response to U.S. tariffs, and a growing push for strategic autonomy, highlighted by Germany’s recently announced €500B five-year infrastructure investment plan.

In contrast, oil—a major driver of the Canadian economy—has significantly underperformed. After a highly volatile June driven by geopolitical tensions, crude prices have now slipped back below the $70 mark, near pre-breakout levels. This weakness has weighed heavily on the Canadian dollar.

The economy of the world’s second-largest country is starting to show signs of rebounding after slowing down in the past year from the effects of higher rates. Canada is a cyclical economy.

With both the European Central Bank and the Bank of Canada nearing the end of their rate-cutting cycles, markets are shifting focus toward longer-term macroeconomic fundamentals to guide movement in the EUR/CAD pair.

EUR/CAD Key resistance levels:

• 2018 Highs – 1.61 to 1.6150
• 2020 & 2025 resistance zone – 1.59 to 1.60

EUR/CAD Key support levels:

• Daily support zone 1.5475 to 1.55
• Pre-breakout pivot turned support 1.5150 to 1.52

After years of steady depreciation, the Swedish krona has staged an impressive comeback in 2025, outperforming most major currencies—including the Euro, which has otherwise been a standout performer.

Several factors are driving this resurgence. Sweden’s economic outlook has brightened, with expectations of a strong rebound in growth. The country’s sound fiscal position continues to boost investor confidence, while rising global demand for Swedish defense exports has added another layer of support.

In contrast, the European Central Bank is expected to continue its rate-cutting cycle, potentially pushing eurozone rates below Sweden's. This divergence in monetary policy further enhances the krona’s appeal among yield-seeking investors.

EUR/SEK Key resistance levels:

• 2024 Support turned resistance: 11.15 to 11.20
• 2024 Major resistance 11.70 to 11.76

EUR/SEK Key support levels:

• 2025 Major support zone 10.75 to 10.80
• Daily support zone 10.90 to 10.95

Footnotes:

¹ https://poland-accounting.eu/2025/05/imf-forecast-poland-to-overtake-japan-spain-and-israel-in-gdp-per-capita-by-2030/

² https://www.bbc.com/news/articles/c15ng4g5g0eo

Disclaimer: