EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – Greenback Declines on Softer U.S. Economic Data

US Dollar Index

The Dollar Index retreated from recent highs, influenced by softer U.S. economic data, including unexpected declines in capital goods orders and moderated Q1 economic growth. Traders are positioning for Friday’s PCE data release, which could impact Federal Reserve rate decisions. The index dipped 0.15% to 105.89, reflecting a slight weakening against major currencies.

The US Dollar Index (DXY) is trading around 105.908, near a resistance zone of 105.748-106.017. The 50 SMA at 105.583 offers support, while RSI at 60.62 suggests moderate bullish momentum. A break above 106.017 could signal further gains, while a dip below 105.583 might indicate a potential decline towards 104.608.

EUR/USD

 

The euro rose 0.18% to $1.0699 against the dollar. However, it’s on track for a monthly loss of about 1.4%, primarily due to political turmoil in the eurozone ahead of France’s upcoming snap election. The pair’s performance continues to be influenced by the contrast between U.S. economic resilience and European political uncertainty.

The EUR/USD pair is trading at 1.0706, near the 50 SMA at 1.07159. Resistance lies at 1.07265 and 1.07861, while support is at 1.07159-1.0704. RSI at 43.32 indicates bearish momentum. A break above 1.07265 could lead to testing the 1.07861 resistance. Conversely, a decline below 1.0704 might target the next support at 1.062. Traders should watch for these key levels for potential market direction.

GBP/USD

Sterling edged up 0.22% to $1.2649, recovering from a one-month low of $1.2616. The pound’s movement reflects a slight weakening of the dollar following mixed U.S. economic data. However, the broader trend still favors dollar strength against major currencies, including the pound, as markets await further economic indicators and central bank signals.

GBP/USD is trading at 1.2649, near the 50 SMA at 1.26713. Resistance is observed between 1.26754 and 1.26984, while support lies around 1.2649. The RSI at 42.33 indicates bearish momentum. A break above 1.26754 could lead to testing 1.26984, while a dip below 1.2649 might target 1.26. Traders should monitor these key levels.

USD/CAD

The Canadian dollar strengthened 0.1% against the US dollar, trading at C$1.3685 or 73.07 US cents, with a range of 1.3677 to 1.3712. Canadian 10-year bond yields decreased slightly to 3.484%, while US benchmark yields fell to 4.302%. The loonie’s strength was supported by rising oil prices, with US crude futures increasing to $81.59 per barrel.

USD/CAD is trading at 1.36835, near the 50 SMA at 1.36944. Resistance is observed at 1.37835-1.38004, while support lies at 1.36214-1.36005. The RSI at 49.45 indicates neutral momentum. A break above 1.36944 could target 1.37835, while a dip below 1.36835 might test the 1.36214 support level. Traders should watch these key levels for direction.

USD/JPY

The yen weakened to 160.47 per dollar, near a 38-year low. It has fallen 2% this month and 12% this year due to interest rate differentials between the U.S. and Japan. Traders remain alert for potential intervention by Japanese authorities to support the yen, especially as it approaches the key 160 level.

USD/JPY is trading at 160.685, above the 50 SMA at 159.114. Resistance is at 160.710, while support is found at 158.500-158.001. The RSI at 69.07 indicates overbought conditions. A break above 160.710 could target higher levels, while a drop below 159.114 might test the 158.500 support. Traders should watch these levels for potential moves.