EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Ground After Powell’s Speech

Key Insights

• U.S. Dollar Index settled above the 103 level as is trying to gain additional upside momentum. 
• EUR/USD attempts to settle above multi-month highs at 1.0760.
• Commodity-related currencies are losing ground as traders take some profits off the table after the recent move. 

U.S. Dollar Rebounds After Sell-Off

U.S. dollar gains some ground against a broad basket of currencies in today’s trading. Fed Chair Jerome Powell has recently delivered a speech  in which he highlighted the importance of Fed’s independence for price stability.

Powell’s speech did not contain any remarks on the current monetary policy, although he noted that unpopular decisions were required to push inflation back to the central bank’s target.

Treasury yields are moving higher today, but this move does not provide  material support to the American currency.

EUR/USD Tests Resistance At 1.0760

EUR/USD continues its attempts to settle above the resistance at multi-month highs at 1.0760.

Today, France reported that Industrial Production increased by 2% month-over-month in November, compared to analyst consensus of 0.8%.

It is clear that the pullback in natural gas prices provided material support to the European economy, as yesterday’s Industrial Production data from Germany also exceeded expectations. The encouraging economic reports provide support to the European currency.

GBP/USD Pulls Back Towards 1.2150

GBP/USD pulls back after an unsuccessful attempt to settle above the 1.2200 level. It should be noted that GBP/USD tried to get below the 1.2100 level but received material support.

RSI remains in the moderate territory, so there is plenty of room to gain additional momentum. A move above 1.2200 will open the way to the test of the resistance at 1.2225.

USD/CAD Gains Ground As Traders Take Profits After The Recent Move

USD/CAD moved back above the 1.3400 level after yesterday’s pullback. Commodity markets are calm today, and commodity-related currencies have found themselves under pressure.

AUD/USD pulled back towards the 0.6875 level, while NZD/USD declined towards 0.6350. If NZD/USD settles below this level, it will head towards the 20 EMA at 0.6310.

USD/JPY Moves Back Above The 132 Level

USD/JPY is currently trying to settle back above the 132 level. The general dynamics of the U.S. dollar remain the key catalyst for USD/JPY. BoJ’s Kuroda is not ready to raise rates, and it is not clear whether Japanese yen will be able to gain sustainable upside momentum against the U.S. dollar in the upcoming weeks.

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