EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – Dollar Index Steadies, Fed Rate Cuts Expected

U.S. Dollar Index (DXY)

The U.S. Dollar Index steadied after data showed inflation cooled last month, reinforcing expectations of Federal Reserve rate cuts this year. The PCE price index, the Fed’s preferred inflation measure, was unchanged, leading markets to anticipate potential easing in September. The Dollar Index reflects the greenback’s performance against major currencies, and its stability suggests a cautious outlook on the dollar amid inflation and interest rate changes.

The U.S. Dollar Index is edging lower on the 4-hour chart, putting it in a position to take out 105.748 and test the 50-period moving average at 105.145. If buyers step in on the move, we could see a retest of 106.017. If selling pressure takes it out, look for 105.371.

EUR/USD

EUR/USD remained flat at $1.0701, with the euro down 1.3% against the dollar in June. Political uncertainty ahead of France’s general elections contributed to the euro’s decline, marking its biggest monthly fall since January. The stable euro-dollar exchange rate reflects the market’s cautious stance amid geopolitical factors and economic data from both regions.

GBP/USD hovered around recent levels, showing minimal movement as the market weighed mixed economic signals from the UK. Inflation concerns and economic growth prospects influenced the pound’s performance. The currency pair’s stability suggests traders are awaiting clearer economic indicators and potential Bank of England policy adjustments.

GBP/USD is trading at 1.2652, facing resistance at 1.2671 and 1.2698. The 50-period SMA at 1.2668 serves as resistance. Support is at 1.2576 and 1.2549. RSI is at 49.81, indicating neutral momentum.

USD/CAD

USD/CAD saw minor changes, reflecting the stability in oil prices, a key driver for the Canadian dollar. The pair’s performance is influenced by oil market trends and economic data from both the U.S. and Canada. Current stability suggests balanced market sentiment, with traders monitoring oil prices and central bank policies for future direction.

USD/CAD is trading at 1.3657, below the 50-period SMA at 1.3690, indicating a bearish trend. Support levels are at 1.3621 and 1.3600. Resistance is at 1.3783 and 1.3800. RSI is 39.58, showing bearish momentum.

USD/JPY

USD/JPY steadied at 160.82 after hitting a 38-year high of 161.27. The dollar has surged 14% year-to-date against the yen, driven by significant interest rate differentials between the U.S. and Japan. The pair’s stability follows U.S. inflation data, with markets expecting Federal Reserve rate cuts this year. The yen remains sensitive to U.S. economic data and Treasury yields.

USD/JPY is trading at 160.78, with support at 159.48 and 158.50, and resistance at 161.00. The 50-period SMA at 159.48 indicates a bullish trend. RSI is at 60.54, suggesting moderate bullish momentum.