EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Retreats As Inflation Rate Drops To 3%

U.S. Dollar

U.S. Dollar Index is under strong pressure as traders react to U.S. inflation reports. Inflation Rate declined from 3.3% in May to 3% in June, compared to analyst consensus of 3.1%. On a month-over-month basis, Inflation Rate was -0.1%. Core Inflation Rate decreased from 3.4% in May to 3.3% in June, while analysts expected that it would remain unchanged.

In case U.S. Dollar Index settles below the support at 104.40 – 104.60, it will head towards the next support level, which is located in the 103.50 – 103.75 range.

EUR/USD

EUR/USD gains ground as traders focus on U.S. inflation data. In the EU, traders had a chance to take a look at Germany’s inflation reports. Germany’s Inflation Rate declined from 2.4% in May to 2.2% in June, in line with analyst estimates.

A move above the resistance at 1.0900 – 1.0915 will open the way to the test of the next resistance at 1.1000 – 1.1015.

GBP/USD

GBP/USD tests new highs, supported by U.S. inflation data. In the UK, GDP increased by 0.4% month-over-month in May, compared to analyst consensus of +0.2%.

In case GBP/USD stays above the resistance at 1.2880 – 1.2900, it will move towards the next resistance level at 1.2980 – 1.3000.

USD/CAD

USD/CAD is mostly flat despite the strong rally in precious metals markets. Other commodity-related currencies are moving higher in today’s trading session.

If USD/CAD declines below the 1.3600 level, it will head towards the support at 1.3480 – 1.3500.

USD/JPY

USD/JPY retreats as traders focus on falling Treasury yields. The yield of 2-year Treasuries declined below the 4.50% level, while the yield of 10-year Treasuries settled below 4.20%.

A successful test of the support at 158.00 – 158.50 will push USD/JPY towards the next support level, which is located in the 154.50 – 155.00 range. On the upside, a move above the 159.00 level will open the way to the test of the nearest resistance at 160.00 – 160.50.

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