EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Is Under Strong Pressure

Key Insights

• EUR/USD rallied towards 1.1000 after ECB left the interest rate unchanged. 
• GBP/USD tested new highs after BoE decision. 
• USD/JPY made an attempt to settle below 141.00 as traders focused on dollar’s weakness. 

U.S. Dollar

U.S. Dollar Index is under strong pressure as traders react to central bank’s rate decisions and commentary. Today, traders also focused on the economic data from the U.S. Retail Sales increased by 0.3% month-over-month in November, compared to analyst consensus of -0.1%. Initial Jobless Claims report indicated that 202,000 Americans filed for unemployment benefits in a week.

In case U.S. Dollar Index settles below the support at 101.75 – 102.00, it will head towards the next support level, which is located in the 100.50 – 100.80 range.

EUR/USD

EUR/USD rallied as traders reacted to ECB decision. The central bank left the interest rate unchanged and signaled that the rate hike cycle has come to an end. However, it looks that ECB is not ready to discuss rate cuts, which is bullish for the European currency.

A successful test of the resistance at 1.1015 – 1.1035 will push EUR/USD towards the next resistance level at 1.1125 – 1.1150.

GBP/USD

GBP/USD moved higher as BoE left the interest rate unchanged but some members voted for a rate hike.

RSI has recently moved into the overbought territory, so the risks of a pullback are increasing.

USD/CAD

USD/CAD tests new lows as traders react to the general weakness of the U.S. dollar and the strong rebound in the oil markets.

It should be noted that USD/CAD is oversold, so it remains to be seen whether it will be able to move below the nearest support at 1.3380 – 1.3410.

USD/JPY

USD/JPY tested support at 141.00 – 141.50 as traders bet that Fed would start cutting rates in the first half of the next year.

From the technical point of view, USD/JPY needs to stabilize near the 141.00 – 141.50 level to have a chance to gain additional downside momentum.

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