May 22, 2025 turned into a thrill ride in the forex market, with major currency pairs making jaw-dropping moves. A barrage of economic data and central bank surprises sent the euro soaring, the yen on a rollercoaster, and the Canadian dollar (loonie) surging. Traders were left buzzing after a day of sudden spikes, sharp reversals, and breakout trends. Below is the lively recap of what happened with EUR/USD, USD/JPY, and USD/CAD – and what it might mean for tomorrow.
EUR/USD
EUR/USD 5-minute chart showing intraday volatility on May 22, 2025. The euro’s big rally (tall blue candles) came after the ECB’s surprise and weak US data, before a slight pullback into the close.
The euro came out swinging, rocketing upward in a move that had euro bulls cheering. Early in the session, EUR/USD was quietly range-bound, waiting for a catalyst. That catalyst hit at 7:30 AM ET when the ECB released its meeting minutes. The report hinted at a more hawkish stance than markets expected, catching traders off guard. In a flash, EUR/USD spiked higher, smashing through its morning resistance. The surge was clearly visible on the chart’s left side as a tall stack of blue candles.
Momentum briefly hesitated around 8:30 AM ET when U.S. data hit the wires. Initial jobless claims came in at 227K vs 229K expected – not a big miss, but enough to give the U.S. dollar a momentary boost. The euro’s rally paused as EUR/USD flickered downward ever so slightly, showing a minor red pullback candle. That dip didn’t last long. By mid-morning, another jolt arrived: U.S. PMI numbers hinted at a cooling economy. The S&P Global Manufacturing PMI slipped into contraction at 49.9, below the 50.2 anticipated, and services PMI also underwhelmed. This weak data sent the dollar reeling and ignited a second euro spike. EUR/USD surged again, taking out its earlier highs – a one-two punch of blue candles on the chart, forming a new intraday peak around the mid-$1.13s. It was as if gravity stopped working on the euro.
The afternoon saw EUR/USD consolidating those hefty gains. Even a surprisingly strong U.S. housing report – Existing Home Sales at 4.15M vs 4.02M forecast – couldn’t faze the euro. Sellers tried to knock the pair down from its highs, resulting in a couple of red candles, but buyers kept stepping in. On the chart this created a double-top tease (two peaks in quick succession) around the day’s high. When ECB officials Elderson and de Guindos spoke around midday, their cautious optimism on inflation gave a modest afterburner to the euro, helping it hold its ground. By the time Fed’s Williams took the mic at noon (offering no hawkish surprises), EUR/USD was comfortably cruising near its highs. The pair closed the session strongly, well above $1.13 and flipped a key resistance into support. It was a decisive bullish breakout day for EUR/USD – a far cry from its subdued start. Euro bulls had won the day, chalking up a gain that has traders asking: How long can this euro party last?
USD/JPY
USD/JPY 5-minute chart on May 22, 2025. A wild whipsaw is evident: an early jump (blue candles) gave way to a steep drop (red candles) as the yen strengthened late in the day.
If EUR/USD was a rocket, USD/JPY was a rollercoaster. The day began with the dollar gaining ground against the yen. Buoyed by the steady U.S. labor data, USD/JPY inched upward in the morning, extending the previous day’s bullish tone. On the chart, the initial hours show a climb toward the mid-145.00s as a series of blue candles – dollar bulls were testing the waters above ¥145. But the ride was just getting started.
Come mid-morning, the script flipped. Weak U.S. economic signals – notably that soft PMI showing manufacturing contraction – spooked dollar bulls. Treasury yields slipped and risk appetite soured, a recipe for yen strength. USD/JPY plunged abruptly, erasing its earlier gains in the blink of an eye. What had been a gentle rise turned into a vicious sell-off, with red candles slicing through the chart. The pair fell from a peak around ¥145+ to the lower-144s within hours – a nearly 100-pip whipsaw that left traders stunned. It was as if someone hit the reverse gear on the dollar. A brief mid-day bounce attempt by the dollar failed to gain traction (one look at the tiny blue blips in the sea of red on the chart tells the story).
Then came the knockout punch for USD/JPY in the late afternoon: Japan’s inflation surprise. At 7:30 PM ET, Japan reported Core CPI at 3.5% (vs 3.2% expected) – a hotter-than-forecast reading that electrified yen buyers. The prospect of rising Japanese inflation fueled chatter that the BoJ might inch toward tightening policy. Almost instantly, the yen zoomed higher, sending USD/JPY to its low of the day. On the chart, this appears as another sharp red plunge on the far right side. By the end of the session, USD/JPY was down for the count, drifting in the ¥143.5 area and hugging its lows. The dollar’s early optimism had fully flipped to a late-day rout, marking a clear trend reversal. This whipsaw day saw USD/JPY break below recent support levels, handing the victory to the yen. After such a tumultuous ride, traders are left wondering if yen strength is the new norm or just a one-day wonder.
USD/CAD
USD/CAD 5-minute chart on May 22, 2025. The pair shows a steady collapse (dominant red candles) as the Canadian dollar strengthened, with only brief pauses (small blue candles) during the downtrend.
The Canadian dollar – affectionately known as the loonie – stole the show in the North American session, powering a big move in USD/CAD. Early in the day, this pair spiked up briefly on a flurry of 8:30 AM ET news, only to slam down in a relentless downtrend afterward. It was a tale of two halves: an initial knee-jerk jump and then a bearish breakout that had USD/CAD bears roaring.
Right at 8:30 AM, traders were hit with a one-two data punch from both sides of the border. From the U.S. came those steady jobless claims – weekly claims of 227K, slightly better than expected – which normally might support the greenback. From Canada came the Raw Material Price Index (RMPI) for April, a key indicator for Canada’s resource-driven economy. The RMPI had previously been in decline (last reading was -1.0%) and continued to signal soft commodity prices. Initially, USD/CAD popped higher for a few ticks as the U.S. dollar tried to flex on the mixed news. But that pop was the bull’s last gasp. With no major positive surprise in either report, the market’s attention turned elsewhere – and that’s where the loonie started to shine.
Once the dust from the data releases settled, sellers took control of USD/CAD. The U.S. dollar began to sag under the weight of broader USD weakness, and the Canadian dollar found fresh bids. Aiding the CAD’s cause was a subtle shift in global sentiment: the disappointing U.S. PMI figures not only hurt the USD directly, but also sparked hopes that the Fed might ease up on rate hikes. That hope gave a lift to risk-sensitive assets like stocks and commodities – including oil, Canada’s lifeblood. Sensing an opportunity, loonie bulls piled in. USD/CAD started cascading lower, breaking below 1.3900 and then 1.3850 support in quick succession. On the chart, it’s a steady stream of red candles heading down to the day’s lows, with only the occasional small blue uptick as a breather. Every minor bounce was sold. The pair’s downtrend accelerated as stop-loss orders got triggered below key levels, fueling a mini free-fall. By afternoon, USD/CAD had plunged to around the mid-1.37s, the lowest in over a week, chalking up an impressive drop for the session.
In the final hours, we saw a bit of profit-taking – a few blue candles emerging as the pair ticked up off its lows. But that late bounce was modest at best. USD/CAD still closed deep in the red, firmly lower on the day. The loonie’s leap was undeniable, and it left a clear mark on the charts: a bearish breakout from the previous range. Traders haven’t seen the Canadian dollar this energized in a while. The message from today’s action? The loonie means business, and any U.S. dollar strength was soundly overpowered.
Outlook
Friday’s session (May 23, 2025) promises to be just as intriguing as traders digest today’s fireworks. With no major U.S. data on tap tomorrow, attention shifts to technical levels and any surprise headlines. Here’s what to watch in the next trading session:
EUR/USD: Can the euro keep the upper hand? After breaking out to multi-week highs, 1.1350 (the former ceiling) is now key support to watch. Bulls will eye the 1.1400 area next if the momentum continues, but beware of profit-taking – the pair is entering overbought territory after its big jump. Any signs of euro-zone strength in overnight data or more hawkish ECB chatter could extend the rally, while a quieter day might see a healthy consolidation of gains.
- USD/JPY: All eyes on the yen’s follow-through. Tonight’s upside surprise in Japan’s inflation has traders on alert for any Bank of Japan hints. If yen bullishness carries into tomorrow, USD/JPY could press lower towards the 143.00 or even 142.50 support region, especially if global risk sentiment stays shaky. On the flip side, if U.S. dollar bulls regroup (or if any BOJ official downplays the CPI jump), we might see USD/JPY attempt a rebound. The 144.50 level now looms as immediate resistance after today’s whipsaw – a line the bulls must recover to negate the yen’s newfound strength.
- USD/CAD: The loonie’s trend will be tested for follow-up strength. USD/CAD just sliced through a week’s worth of support, so traders will watch if it extends the decline or pauses for breath. Key support sits around the mid-1.3700s – a break below that could open the door to the 1.3600s, especially if oil prices continue to firm up and boost CAD sentiment. However, after such a steep drop, don’t be surprised if the pair sees a bit of mean reversion. Any bounce could run into sellers near 1.3850 (the broken support turned potential resistance). Absent any big news, the Canadian dollar’s momentum from today could carry through, albeit at a calmer pace.
One thing’s for sure: this week’s late-game volatility has injected fresh energy into forex markets. Traders will be on their toes heading into Friday, ready for another round. Will the euro’s rally pick up where it left off? Can the yen build on its comeback? Will the loonie keep running with the ball? Stay tuned – if today was any indication, anything can happen in these markets. Happy trading!