EUR/USD, GBP/USD, AUD/USD, USD/JPY – U.S. Dollar Tests Multi-Month Lows

Key Insights

• Demand for the safe-haven U.S. dollar continues to fall. 
• EUR/USD is testing multi-month highs as traders react to the better-than-expected Germany’s Industrial Production report. 
• Commodity-related currencies gain ground as traders focus on China’s reopening, which provides material support to commodity markets.

U.S. Dollar Retreats At The Start Of The Week

U.S. Dollar Index moved to multi-month lows as demand for the safe-haven American currency declined. Interestingly, Treasury yields are trying to rebound after the recent pullback, but this attempt does not provide any support to the U.S. dollar.

The nearest support level for the U.S. Dollar Index is located at 103. If the U.S. Dollar Index manages to settle below this level, it will gain additional downside momentum and move towards the next support at 102.70.

EUR/USD Tests Multi-Month Highs

EUR/USD is currently trying to settle above the resistance at December highs near 1.0735. Today, EUR/USD traders had a chance to take a look at the Industrial Production report from Germany. The report indicated that Germany’s Industrial Production increased by 0.2% month-over-month in November, compared to analyst consensus of 0.1%.

Meanwhile, EU reported that Euro Area Unemployment Rate remained unchanged at 6.5%, in line with the analyst consensus. The warm weather in Europe provided significant support to the European economy as it pushed natural gas prices to multi-month lows. The potential improvement in the outlook for the European economy may provide more support to the euro.

GBP/USD Tries To Settle Above 1.2200

GBP/USD has also managed to gain strong upside momentum today as traders focused on the general weakness of the U.S. dollar.

Currently, GBP/USD is trying to settle above the 1.2200 level. In case this attempt is successful, GBP/USD will move towards the next resistance level, which is located at 1.2225.

AUD/USD Rallies As Commodity Markets Move Higher

AUD/USD is testing new highs as commodity markets gained strong upside momentum today. China’s reopening is the key driver for today’s commodity market strength.

Currently, AUD/USD is trying to settle above the 0.6950 level. NZD/USD moved towards the 0.6400 level, while USD/CAD made an attempt to settle below 1.3360.

USD/JPY Settled Near The 132 Level

USD/JPY is swinging between gains and losses in today’s trading session. USD/JPY settled near the 132 level as dollar’s general weakness is offset by worries about the dovish policy of the BoJ. From a big picture point of view, the general trend remains bearish as the recent attempt to rebound was quickly sold.

For a look at all of today’s economic events, check out our economic calendar.