EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As Retail Sales Beat Expectations

Key Insights

• EUR/USD pulled back towards the 1.0850 level as traders reacted to U.S. Retail Sales report. 
• GBP/USD gained ground as UK inflation reports exceeded analyst expectations. 
• USD/JPY climbed above the 148.00 level as Treasury yields moved higher. 

U.S. Dollar

U.S. Dollar Index gains ground as traders react to the strong Retail Sales report, which indicated that Retail Sales increased by 0.6% month-over-month in December.

In case U.S. Dollar Index settles above the resistance at 103.50 – 103.75, it will move towards the next resistance level at 104.35 – 104.55.

EUR/USD

EUR/USD remains under pressure after the release of the final reading of Euro Area inflation data. Inflation Rate increased from 2.4% in November to 2.9% in December, in line with the analyst consensus.

RSI has recently moved back into the moderate territory, so there is enough room to gain additional downside momentum in case the right catalysts emerge.

GBP/USD

GBP/USD gains some ground as traders focus on UK inflation data. Inflation Rate increased from 3.9% in November to 4% in December, while Core Inflation Rate remained unchanged at 5.1%. Both reports exceeded analyst expectations.

If GBP/USD settles back above the 50 MA at 1.2714, it will head towards the next resistance at 1.2820 – 1.2850.

USD/CAD

USD/CAD is moving higher as commodity-related currencies remain under pressure.

In case USD/CAD stays above the 1.3500 level, it will head towards the resistance at 1.3590 – 1.3620.

USD/JPY

USD/JPY tests new highs as traders reduce their bets on a dovish Fed after the release of strong Retail Sales data.

A move above 148.50 will push USD/JPY towards the next resistance at 149.50 – 150.00.

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