EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground After PMI Reports

Key Insights

• EUR/USD pulled back towards 1.0950 as traders reacted to Manufacturing PMI reports. 
• USD/CAD gained ground as demand for commodity-related currencies declined. 
• USD/JPY moved above 141.50 as traders focused on rising Treasury yields. 

U.S. Dollar

U.S. Dollar Index gains ground as traders react to the disappointing Manufacturing PMI report, which indicated that Manufacturing PMI decreased from 49.4 in November to 47.9 in December.

In case U.S. Dollar Index manages to stay above the resistance at 101.75 – 102.00, it will move towards the next resistance level at 103.50 – 103.75.

EUR/USD

EUR/USD moved lower after the release of Euro Area Manufacturing PMI report, which showed that Euro Area Manufacturing PMI improved from 44.2 in November to 44.4 in December.

A successful test of the support at 1.0925 – 1.0950 will open the way to the test of the next support level, which is located in the 1.0810 – 1.0830 range.

GBP/USD

GBP/USD tests support at 1.2650 – 1.2685 as traders focus on the general strength of the U.S. dollar and the disappointing UK Manufacturing PMI report, which indicated that UK Manufacturing PMI declined from 47.2 to 46.2.

If GBP/USD settles below 1.2650, it will head towards the next support at 1.2370 – 1.2410. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum.

USD/CAD

USD/CAD tests resistance at 1.3275 – 1.3300 as demand for commodity-related currencies declines. The disappointing PMI reports indicate that demand for commodities may be weak in the upcoming months.

If USD/CAD stays above the 1.3300 level, it will head towards the next resistance at 1.3380 – 1.3410.

USD/JPY

USD/JPY rebounds from recent lows as traders focus on rising Treasury yields. The yield of 2-year Treasuries settled above the 4.30% level, while the yield of 10-year Treasuries moved above 3.90%.

A move above the 50 MA at 142.36 will open the way to the test of the resistance at 144.65 – 145.00.

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