Five key currency pairs to watch in September 2025 and why

Summer is almost over, and we are now approaching the tail end of Q3 2025. Here are the five currency pairs to have on your radar for September.

However, before we delve into these featured currency pairs and their respective technical charts, let me share a key, overarching macro theme that might potentially have a significant impact on the FX market.

The US Federal Reserve has paused its interest rate cycle since the start of this year after cutting the Fed Funds rate by 100 basis points (bps) to lower it to 4.25%-4.50% in December 2024.

Throughout 2025, until the prior FOMC meeting held in July, Fed Chair Powell’s ex-post FOMC press conferences have provided a “wait and see” data-dependent monetary policy guidance due to the risk of a sticky inflationary trend arising from the US White House administration’s tariff policy.

Interestingly, Powell’s “watch and see” stance has tilted to the dovish side after his Jackson Hole Symposium speech in August, citing softness in the US labor market that outweighed the persistent inflation risk from tariffs.

The markets have reacted to this shift; the 2-year US Treasury yield, which is sensitive to changes in the Fed’s monetary policy stances, has dropped by 15 bps since Fed Chair Powell’s speech in Jackson Hole on 22 August to 3.64%, a three-month low at the time of writing (see Fig. 1).

Based on a one-month rolling performance as of 29 August, the yield spread premium between the 2-year US Treasury note and an equal-weighted average of 2-year sovereign bonds of Germany, the UK, Japan, Canada, Switzerland, Australia, and China has narrowed by 13 bps to 1.62% over the same period.

Hence, putting downside pressure on the US dollar, where the US Dollar Index declined by -0.7% to trade at 97.90, just a whisker away from its current 52-week low of 96.38 printed on 1 July, as Fed rate cut bets increase.

The price action of the EUR/USD has continued to trade above a medium-term ascending trendline in place since the 3 February 2025 low (see Fig. 2).

The daily MACD trend indicator of the EUR/USD has flashed a bullish crossover signal above its centreline, which suggests that the EUR/USD may resume its up-move sequence.

Key medium-term pivotal support on the EUR/USD is at 1.1570/1.1530. Intermediate resistance stands at 1.1745 (descending trendline from 1 July 2025 high), with the next resistances coming in at 1.1830 and 1.1910.

However, a break below 1.1530 may dampen the bullish tone to revisit the 1 August 2025 swing low area of 1.1400/1.1370. Failure to hold at 1.1370 opens the scope for the possibility of a deeper corrective move to expose the next supports at 1.1220 and 1.1050 (also the 200-day moving average).

French Prime Minister Bayrou’s decision to call a parliamentary confidence vote on 8 September on his 44-billion-euro budget plan for 2026 may trigger political turmoil in France, as the three largest opposition parties have all indicated that they will vote against the motion.

Hence, the EUR/GBP cross pair may see a pickup in volatility in September.

Following a 6% rally from the 28 February 2025 low of 0.8242, EUR/GBP’s bullish momentum has stalled at the key medium-term resistance of 0.8740, where price faced two notable rejections on 11 April and 7 August 2025 (see Fig. 3).

Its price actions have dropped below the 20-day and 50-day moving averages, coupled with the daily RSI momentum indicator, which shaped a bearish reaction at its former ascending support, now turns into pull-back resistance.

These observations highlight the absence of strong bullish momentum in EUR/GBP, thereby raising the risk of a corrective decline. Watch the supports at 0.8500 and 0.8450 (also the 200-day moving average).

A clearance above 0.8740 may resume the medium-term uptrend phase for the next resistance to come in at 0.8850/0.8875.

The USD/JPY has been trading within a choppy “Ascending Wedge” range configuration since the 22 April 2025 low of 138.90.

Given that, the yield premium between the 2-year US Treasury note and the 2-year Japanese Government Bond has continued to narrow since the start of the year. Right now, it has broken below a key support at 2.9% to hit a three-year low at 2.75% at the time of writing.

These observations suggest an emergence of monetary policy divergence between the Fed and BoJ that may assert potential downside pressure on the USD/JPY (see Fig. 4).

The daily RSI momentum indicator has broken below its previous ascending support, signalling a potential revival of medium-term bearish momentum in USD/JPY.

A breakdown below the 145.50 “Ascending Wedge” range support may expose the next supports at 142.35 and 140.00/138.90 (see Fig. 5).

A clearance above 151.30 key medium-term pivotal resistance sees the major resistance coming in at 154.50.

The AUD/USD has been trading in a volatile “Expanding Wedge” range configuration since 24 April 2025, as the Australian central bank, RBA, adopts a measured and data-dependent approach to its current dovish monetary policy stance (see Fig. 6).

The recent decline of -2.3% from the 14 August 2025 high to the 21 August 2024 low materialized after the RBA slashed its cash rate by 25 bps to 3.6% on 12 August.

The AUD/USD has managed to find support at the lower boundary of the “Expanding Wedge” and the 200-day moving average.

The daily RSI momentum indicator is now flashing an impending bullish breakout from its descending resistance at the time of writing, which may suggest an emergence of a medium-term bullish momentum condition.

A clearance above the intermediate resistance of 0.6560 sees the medium-term “Expanding Wedge” resistance at 0.6660/0.6700 that also confluences with the long-term secular descending trendline in place since the 25 February 2021 high.

However, a break below 0.6350 may trigger a correction to expose the next medium-term support at 0.6130.

China’s offshore yuan (CNH) has surged significantly against the greenback since the start of August, supported by a buoyant stock market in China, where the CSI 300 benchmark stock index is poised to record a monthly gain of 10% and almost a three-year high.

The USD/CNH dropped to a fresh 10-month low of 7.1260 at the time of writing and traded below its 50-day and 200-day moving averages (see Fig. 7).

The daily MACD trend indicator has declined steadily below its centreline since 22 August 2025, which suggests the USD/CNH has evolved into a potential medium-term downtrend phase.

A break below the 7.1000 intermediate support may expose the next medium-term support at 6.9900 (also the lower boundary of a medium-term descending channel from 8 April 2025 high).

On the flip side, a clearance above the 7.2390 key medium-term pivotal resistance jeopardizes the bearish trend for the next medium-term resistances to come in at 7.3750 and 7.4294.