EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Retreats As Traders React To PPI Data

U.S. Dollar

U.S. Dollar Index is losing ground as traders react to Producer Prices data for June. PPI increased by 0.2% month-over-month, compared to analyst consensus of +0.1%. Core PPI grew by 0.4%, compared to analyst forecast of +0.2%. Today, traders also focused on Michigan Consumer Sentiment report. The report showed that Consumer Sentiment decreased from 68.2 in June to 66.0 in July, while analysts expected that it would grow to 68.5. The weaker-than-expected Consumer Sentiment report put additional pressure on the American currency.

In case U.S. Dollar Index settles below the 104.00 level, it will head towards the support at 103.50 – 103.75.

EUR/USD

EUR/USD tests resistance at 1.0900 – 1.0915 as traders focus on U.S. economic data.

A move above the 1.0915 level will push EUR/USD towards the next resistance, which is located in the 1.1000 – 1.1015 range.

GBP/USD

GBP/USD tests new highs as traders focus on general weakness of the U.S. dollar. Falling Treasury yields put additional pressure on the American currency.

It should be noted that RSI is in the extremely overbought territory, so the risks of a pullback are increasing.

USD/CAD

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

USD/CAD found strong support in the 1.3600 – 1.3620 range. In case USD/CAD manages to settle above 1.3650, it will move towards the resistance at 1.3785 – 1.3800.

USD/JPY

USD/JPY continues its attempts to settle below the support at 158.00 – 158.50 as traders focus on falling Treasury yields. Traders bet that Fed will start cutting rates soon. USD/JPY is sensitive to Fed policy outlook due to the ultra-dovish policy of the BoJ, so the start of Fed rate cut cycle may serve as a significant bullish catalyst for the Japanese yen.

If USD/JPY stays below the 158.00 level, it will move towards the support at 154.50 – 155.00.

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