Asian Forex Overview (May 19 - 23)

Last week brought the latest CPI numbers for the US dollar. The 2.3% read indicated that inflation moved one step closer to the 2% target. Naturally, this number also supports the desire for the Fed's monetary relaxation in the form of rate cuts. Alongside the pause of China's tariffs, the result was a nearly 3% surge in the S&P 500, which has staged a V-shaped recovery, moving to a striking distance near the all-time highs. 

The same cannot be said for the US dollar, which, although losing nearly 10% peak-to-trough in 2025, has only recovered about 3% of that. The Australian dollar, an important commodity currency, has fared better but hit multiple resistance levels last week and, despite good employment numbers, has started to decline. Its potential reversal should be in focus over the next few weeks, particularly with the anticipated rate cut on Tuesday.

Other notable news in the week ahead will include the latest Canadian and British CPI, German PMI,  and Canadian retail sales.

Key News:

• Tuesday: AUD – Interest Rate Decision, CAD - CPI
• Wednesday: GBP - CPI
• Thursday: EUR – French PMI, German PMI, GBP – PMI, USD – PMI, Unemployment
• Friday: GBP – Retail Sales, CAD – Retail Sales

Pairs In Focus

1. EUR JPY

EUR JPY has been one of the top range-bound pairs in 2025 so far. The pair has mostly moved between 161 support and 164 resistance, with rare peaks above and below under extreme circumstances.

 

EUR/JPY Daily Chart, Source: TradingView

After a short rally and a brief touch of 164.500, it has reverted below once again, heightening the possibility of testing the key level around 161.150. Retail sentiment is nearly 70% long, making this pair a good forex short-selling candidate.

2. GBP SGD

GBP / SGD tested the key support last week, and the level of 1.71450 held the pullback. The recent movement further solidified the thesis that the short-term bottom occurred earlier this month.

GBP/SGD Daily Chart, Source: TradingView

Therefore, the price is expected to move higher, testing the resistance at 1.73800, which is the first target above the market.

Notes:

• AUD/NZD: Hit the weekly resistance, but it remains relatively bullish compared to other AUD pairs.
• AUD CAD: Briefly broke the 0.89 resistance before moving lower. The next move might test the support at 0.88400.
• AUD/CHF: It remains forming a bearish flag. The lower trendline on the daily chart is worth watching for potential breakouts.
• AUD/SGD: Swept the stops above the market before a big move lower toward the end of the week. The trend is bearish.
• AUD/JPY:  Hit the resistance around 95.600 before a big move lower. Support to watch below is 90.500.
• CAD/JPY: A new higher high was established, but the trend remains uncertain until a higher low is established. The support to watch is 103.300.
• CHF JPY: For the fifth week in a row, failed to break above 176 resistance. The likely move would be to test 172 support.
• EUR/AUD: Gapped below the 1.74300 support, but closed the gap before the end of the week. Intermediate trend is bearish, but long-term trend is bullish, adding to uncertainty.
• EUR NZD: Remains range-bound without clear price action.
• GBP AUD: It shows signs of short-term bottoming, but it has to break above 2.08400 to confirm the next leg up.
• GBP NZD: It made a higher high after a higher low, confirming that the next part of the uptrend might be coming.
• NZD/JPY: Swept the resistance around 87.300 before pulling back. As long as support at 84.500 holds, the pair is likely to trade higher.