EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Retreats As ISM Services PMI Drops Below 50

U.S. Dollar

U.S. Dollar Index pulls back as traders react to the weaker-than-expected ISM Services PMI report. The report indicated that ISM Services PMI declined from 53.8 in May to 48.8 in June. Today, traders also had a chance to take a look at the Factory Orders data for May. Factory Orders declined by 0.5% month-over-month, compared to analyst consensus of +0.2%. Treasury yields moved lower after the release of the ISM Services PMI report, putting additional pressure on the American currency.

In case U.S. Dollar Index manages to settle 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 the better-than-expected Euro Area Services PMI report. The report showed that Euro Area Services PMI declined from 53.2 in May to 52.8 in June, compared to analyst consensus of 53.5. Numbers above 50 show expansion.

A successful test of the resistance at 1.0785 – 1.0800 will open the way to the test of the next resistance level at 1.0900 – 1.0915.

GBP/USD

GBP/USD rallied as UK Services PMI report exceeded analyst expectations. The weak ISM Services PMI report provided additional support to GBP/USD.

Traders should note that RSI is in the overbought territory, so the risks of a pullback are increasing.

USD/CAD

USD/CAD tests new lows amid rally in precious metals markets. Other commodity-related currencies are also moving higher in today’s trading session.

In case USD/CAD manages to settle below the support at 1.3600 – 1.3620, it will head towards the next support level at 1.3480 – 1.3500.

USD/JPY

USD/JPY moved away from session highs as traders reacted to ISM Services PMI report. It should be noted that the pullback was quickly bought.

There are no signs of interventions from the BoJ. A move above the resistance at 161.50 – 162.00 will provide USD/JPY with a chance to gain additional momentum.

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