EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Pulls Back As Traders Focus On Powell

U.S. Dollar

U.S. Dollar Index is losing some ground as traders react to the second day of Jerome Powell’s testimony. Powell did not say anything new, so market’s reaction is not strong. Treasury yields are moving lower, which is bearish for the U.S. dollar.

In case U.S. Dollar Index settles below the 105.00 level, it will head towards the next support, which is located in the 104.40 – 104.60 range.

EUR/USD

EUR/USD gains ground as traders focus on falling Treasury yields. From a big picture point of view, traders stay cautious ahead of U.S. inflation reports, which will be released tomorrow.

A move above the 1.0850 level will open the way to the test of the resistance at 1.0900 – 1.0915.

GBP/USD

GBP/USD tests new highs as traders stay focused on the recent political developments in the UK.

In case GBP/USD manages to settle above the 1.2850 level, it will head towards the nearest resistance level, which is located in the 1.2880 – 1.2900 range.

USD/CAD

USD/CAD tests support at 1.3600 – 1.3620 as commodity markets are moving higher, which is bullish for the Canadian dollar.

In case USD/CAD settles below the support at 1.3600, it will gain additional downside momentum and move towards the next support level at 1.3480 – 1.3500. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/JPY

USD/JPY is trying to settle above the key resistance at 161.50 – 162.00 as BoJ does not intervene to provide support to the Japanese currency.

The technical picture is bullish, and USD/JPY has a decent chance to settle above the 162.00 level. In this scenario, USD/JPY will gain additional momentum and move towards the 165.00 level. Potential BoJ interventions remain the key risk for the bulls.

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