EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As Composite PMI Beats Expectations

U.S. Dollar

U.S. Dollar Index gains ground as traders react to PMI reports. Manufacturing PMI declined from 49.6 in July to 48.0 in August, compared to analyst forecast of 49.6. Services PMI increased from 55.0 to 55.2, while analysts expected that it would drop to 54. Today, traders also had a chance to take a look at the Existing Home Sales report for July. The report showed that Existing Home Sales increased by 1.3% on a month-over-month basis, in line with analyst expectations.

In case U.S. Dollar Index settles above the 101.50 level, it will head towards the nearest resistance, which is located in the 102.00 – 102.20 range.

EUR/USD

EUR/USD pulls back as traders focus on the Euro Area PMI data. Manufacturing PMI decreased from 45.8 in July to 45.6 in August, while Services PMI improved from 51.9 to 53.3. Euro Area Consumer Confidence declined from -13 in July to -13.4 in August, compared to analyst forecast of -12.6. From a big picture point of view, the European manufacturing sector remains under strong pressure, but the solid performance of the services sector provides support to the economy.

If EUR/USD settles below the 1.1110 level, it will head towards the 50 MA at 1.1035.

GBP/USD

GBP/USD is mostly flat as traders react to the encouraging UK PMI data. Manufacturing PMI increased from 52.1 to 52.5, while Services PMI improved from 52.5 to 53.3. Both reports exceeded analyst expectations.

It should be noted that RSI is in the overbought territory, so the risks of a pullback are increasing.

USD/CAD

USD/CAD moved away from recent lows as traders focused on the strong pullback in precious metals markets.

In case USD/CAD settles back above the resistance at 1.3600 – 1.3620, it will head towards the next resistance level, which is located in the 1.3700 – 1.3715 range.

USD/JPY

USD/JPY gains ground as traders focus on rising Treasury yields. It remains to be seen whether USD/JPY will gain sustainable upside momentum ahead of Powell’s speech at Jackson Hole Symposium.

If USD/JPY settles above the resistance at 146.00 – 146.50, it will move towards the next resistance level at 149.30 – 149.70.

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