EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecast – U.S. Dollar Tests Multi-Month Highs

Key Insights

• EUR/USD pulled back towards the 1.0850 level as traders waited for additional EU data.
• GBP/USD moved lower after an unsuccessful attempt to settle above 1.2800.
• USD/JPY declined as traders took some profits off the table. 

U.S. Dollar

U.S. Dollar Index tests new highs as traders react to the Existing Home Sales report, which indicated that Existing Home Sales declined by 2.2% month-over-month in July.

In case the U.S. Dollar Index manages to settle above the strong resistance at 103.40 – 103.65, it will have a chance to gain additional upside momentum.

EUR/USD

EUR/USD is moving lower as traders wait for additional economic data from the Eurozone.

In case EUR/USD settles below the support at 1.0835 – 1.0850, it will head towards the next support level, which is located in the 1.0670 – 1.0700 range.

GBP/USD

GBP/USD has recently made an attempt to climb above the 1.2800 level but lost momentum and pulled back towards the key 1.2725 – 1.2750 area.

If GBP/USD moves back below 1.2725, it may gain additional downside momentum and move towards the support in the 1.2590 – 1.2620 range.

USD/CAD

USD/CAD climbed above the 1.3520 level and is trying to gain more ground. Oil markets are moving lower, which is bearish for commodity-related currencies.

In case USD/CAD settles above 1.3550, it will head towards the next significant resistance level at 1.3650 – 1.3670.

USD/JPY

USD/JPY pulls back as traders continue to take profits at multi-month highs. Treasury yields have moved away from session highs, which served as an additional bearish catalyst for USD/JPY.

Taking a look at the daily chart, USD/JPY faced resistance near 146.50, but the current pullback looks healthy after the strong rally from July lows.

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