EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Retreats After Powell’s Dovish Comments

U.S. Dollar

U.S. Dollar Index tested new lows as traders reacted to dovish comments from Fed Chair Powell. He said that time had come for the policy to adjust. Powell’s confidence has grown that inflation was on the path to Fed’s target, and he signaled that Fed was ready to start the rate cut cycle.

In case U.S. Dollar Index settles below the support at 100.80 – 101.00, it will move towards the next support level, which is located in the 99.55 – 99.75 range.

EUR/USD

EUR/USD tested new highs as traders focused on Fed policy outlook. Treasury yields pulled back, providing additional support to EUR/USD.

EUR/USD has recently settled above the previous resistance at 1.1110 – 1.1135 and is trying to climb above the 1.1200 level. In case this attempt is successful, EUR/USD will head towards the next resistance, which is located in the 1.1250 – 1.1275 range.

GBP/USD

GBP/USD gained ground as traders focused on general weakness of the American currency. Today, traders also had a chance to take a look at Gfk Consumer Confidence report. The report indicated that Consumer Confidence remained unchanged at -13 in August, compared to analyst consensus of -12.

In case GBP/USD manages to settle above the 1.3200 level, it will head towards the next resistance, which is located in the 1.3280 – 1.3300 range.

USD/CAD

USD/CAD tested new lows amid rising demand for commodity-related currencies, which was driven by the rally in commodity markets.

The nearest support level for USD/CAD is located in the 1.3480 – 1.3500 range. In case USD/CAD declines below the 1.3480 level, it will head towards the next support, which is located in the 1.3360 – 1.3380 range.

USD/JPY

USD/JPY moved lower amid falling Treasury yields. It should be noted that USD/JPY made several attempts to settle above the nearest resistance at 146.00 – 146.50, but these attempts yielded no results.

In case USD/JPY settles below the 145.00 level, it will head towards the next support level at 141.80 – 142.50.

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