Five FX pairs you should be watching in June 2025 and why

June is well and truly underway and promises to be a big month for financial markets.

There are a host of central bank policy meetings and data releases coupled with the deadline for trade deal proposals which could shape market dynamics for months to come.

Here are some of the more interesting currency pairs and factors that may impact them for the rest of the month.

EUR/USD has been on an interesting run of late, with the pair trading at a multi-month key level around the 1.1450 handle.

The European Central Bank (ECB) followed through with the expected rate cut on June 5, 2025, but it was followed by comments that suggest a summer pause may be on the cards.

This may come as a surprise to some, given the rapidly declining inflationary pressure, which came in at 1.9% at the start of June, inside the ECB targeted range. There remains a growing concern that there may be some aftershocks on the inflation front, and with uncertainty around trade deals still in play, another rate cut in 2025 remains a possibility.

Trade deals and the US dollar

The Federal Reserve meeting later this month is one event that could have a major impact on EUR/USD. The Fed is currently expected to hold rates steady as it waits for more data. According to LSEG data, there is a 98.8% probability that rates will be kept on hold, yet the US dollar continues to struggle.

Beyond the monetary policy picture, the US dollar is facing pressure from the lack of certainty around tariffs. The month of June, however, is expected to bring some clarity on that front, with Wednesday, June 4, 2025 being the deadline for trade deal proposals with the US.

Any trade deal announcements in the coming weeks could offer the US dollar support and thus weigh on EUR/USD. However, the longer markets have to wait on clarity, the greater the chance of further USD weakness and thus EUR/USD gains.

EUR/USD is trading around a multi-year key level at 1.1450, which has served as a key area of support and resistance since 2016.

As things stand, a weekly candle close above this level could open up the possibility of further upside for the pair.

However, a rejection of this level could be the beginning of a potential retracement in EUR/USD.

A lot of this will likely hinge on developments on the trade deal front.

USD/CHF remains an interesting pair to watch as the Swiss Franc continues to attract safe haven flows as market sentiment shifts back and forth.

Trade deal developments are also playing a major role here at the moment, as USD weakness seems to be the other key factor in the pairs decline. Thus, improving sentiment on trade deals and global growth will impact haven flows and thus could potentially aid a USD/CHF recovery.

Another area of interest lies in the potential for intervention from the Swiss National Bank (SNB). The reliance of the Swiss economy on the export market means that a stronger franc is undesirable for businesses. The SNB will be hoping that the US dollar will recover, or it leaves the Central Bank in a difficult position. This is definitely a pair worth watching.

From a technical standpoint, USD/CHF appears to have found a bottom for now at the 0.8079 handle.

The RSI period-14 on a daily timeframe remains near oversold territory.

For more information on the Relative Strength Index, read Understanding the Relative Strength Index.

At present there is very little indication that a recovery in price is imminent, however a change in overall market sentiment has the potential to change the outlook quickly.

The massive rejection around the 0.8400 means this level will be crucial if a bullish move is to materialize. On the downside, immediate support rests at 0.81508 and the psychological 0.8000 handle, which has yet to be visited.

Australian GDP came in below estimates this past week, which has added to expectations of another 25 bps rate cut in July. As things stand, LSEG data shows markets are pricing in a 81.5% probability of a rate cut and with inflation within the RBA targeted range, this seems plausible.

As with most currency pairs that include the US dollar, tariffs and trade deals will play a major role in how AUD/USD shapes up in June.

Trade deal announcements could be more complicated to navigate for AUD/USD. The reason for this is down to the relationship between the Australian dollar's performance and that of the Chinese economy.

Despite a broad-based stimulus by Chinese authorities, local demand remains constrained, and thus, raw material demand may remain under pressure. This, in turn, could weigh on the Australian dollar.

However, trade deals could help push up the Chinese export market and thus lead to a positive view of the Australian dollar, while at the same time helping the US dollar recover. This, in turn, could lead to gains by each currency canceling the other out and keeping AUD/USD range-bound for the foreseeable future.

A lot of conflicting ways AUD/USD could play out in June, and this adds a layer of intrigue to the pair. Given the recent consolidation the pair has been experiencing, I am sure market participants would welcome some sort of volatility once more.

AUD/USD has been in a period of consolidation for the past six weeks or so, following the initial V-Shape recovery since the early April lows.

A key level of resistance rests around the 0.6513 handle, which has held firm thus far.

A weekly candle close above this handle could potentially pave the way for further upside.

Alternatively, failure to break above this level could leave the pair in its consolidation range and potentially eyeing a retracement.

GBP/USD has been on a tear against the greenback in a similar vein to EUR/USD in 2025. Market participants appear to have pivoted from the US dollar toward the euro and the GBP as uncertainties around tariffs and the US economy have grown.

The narrative does appear to have shifted from the euro and the GBP now seen as potentially safer than the US dollar. This has certainly helped GBP put in gains against the Greenback with the pair now trading at levels last seen in February 2022.

Looking at potential movement in June, we do have both the Federal Reserve and Bank of England (BoE) meetings on 18 and 19 June respectively. These events are however likely to be overshadowed by trade deal developments this month, as this remains the primary factor driving the pair at present.

Trade deals will likely improve confidence in the US dollar to some degree and this could potentially lead to USD appreciation, whereas the lack of clarity may keep the GBP elevated moving forward.

From a technical standpoint, cable has continued to print higher highs and higher lows while trading within an ascending channel that stretches back to the beginning of 2025.

There is an inner trendline which is currently a point worth monitoring and could provide some sign as to when a potential change in momentum may occur or a potential continuation of bullish momentum.

The RSI period-14 remains above the 50 neutral level but below overbought territory for now. A break below 50 or a push toward overbought conditions may be another sign that market participants could keep an eye out for as the month progresses.

Key levels to the downside include the 1.3500 handle and 1.3260 while the psychological whole number at 1.3750 and 1.4000 may come into play in the case of further upside.

The South African Rand (ZAR) has been one of the emerging market currencies that has benefited greatly from a weaker US dollar.

The move, like many we have seen, has been largely down to USD weakness, while moderate reforms and the ongoing improvements by the Government of National Unity have helped restore a modicum of confidence in the South African economy.

The South African Reserve Bank cut interest rates on May 29, 2025, and the move barely weakened the currency at all. This adds to the narrative that the move has been largely driven by US dollar weakness rather than economic data or monetary policy. Of course, this is nothing new for anyone who has followed the ZAR in recent years.

USD/ZAR will be waiting on developments around trade deals and their potential impact on the US dollar to help drive its next major move. As discussed above with the GBP/USD currency pair, trade deals will likely improve confidence in the US dollar to some degree and this could potentially lead to USD appreciation and thus lead to a push higher for USD/ZAR.

Let's examine the technical picture for clues as to USD/ZAR’s next move.

From a technical standpoint, USD/ZAR has broken below the long-term ascending trendline and the key 18.00 mark for the first time in 2025.

We are also seeing a potential death cross chart pattern as the 50-day MA crosses below the 100-day MA, which is usually a sign of bearish momentum.

However, given that USD/ZAR has printed a fresh lower low around 17.68, a short-term pullback cannot be ruled out.

Conflicting scenarios that will likely depend on what happens next on the trade deal front.