EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Ground After PPI And Initial Jobless Claims Reports

Key Insights

• GBP/USD pulled back towards the 1.2500 level after BoE raised rates by 25 bps. 
• USD/CAD rallied as traders focused on the pullback in the oil markets. 
• USD/JPY remained mostly flat despite falling Treasury yields. 

U.S. Dollar

U.S. Dollar Index rallied as traders reacted to Producer Prices and Initial Jobless Claims reports. In addition, it looks that FDIC decision to make big banks pay $16 billion to replenish the deposit insurance fund after the recent bank failures boosted market confidence.

The nearest resistance level for the U.S. Dollar Index is located at 102.30. A move above this level will push the U.S. Dollar Index towards the resistance at 102.65. In case the U.S. Dollar Index climbs above 102.65, it will head towards the 102.80 level.

R1:102.30 – R2:102.65 – R3:102.80

S1:102.00 – S2:101.80 – S3:101.50

EUR/USD

EUR/USD pulled back as traders focused on the general strength of the U.S. dollar.

A move below the support at 1.0910 will push EUR/USD towards the next support level at 1.0880. In case EUR/USD declines below this level, it will head towards the support at 1.0840.

R1:1.0940 – R2:1.0970 – R3:1.1000

S1:1.0910 – S2:1.0880 – S3:1.0840

GBP/USD

GBP/USD gained strong downside momentum after the BoE Interest Rate Decision. The Bank of England raised rates by 25 basis points and signaled that it may need additional rate hikes to control inflation. While rate hikes usually serve as a bullish catalyst, traders decided to “sell the news” and pushed GBP/USD towards the 1.2500 level.

If GBP/USD settles below the support at 1.2500, it will head towards the next support level, which is located at 1.2460. A move below this level will push GBP/USD towards the support at 1.2440.

R1:1.2525 – R2:1.2550 – R3:1.2580

S1:1.2500 – S2:1.2460 – S3:1.2440

USD/CAD

USD/CAD rallied as oil markets continued to move lower. The general strength of the U.S. dollar served as an additional bullish catalyst for USD/CAD.

A move above the 1.3490 level will open the way to the test of the resistance at 1.3530. In case USD/CAD climbs above 1.3530, it will head towards the next resistance at 1.3565.

R1:1.3490 – R2:1.3530 – R3:1.3565

S1:1.3450 – S2:1.3410 – S3:1.3385

USD/JPY

USD/JPY is mostly flat despite the pullback in Treasury yields. The strong pullback in the yields of Japan’s government bonds provided some support to USD/JPY in today’s trading session.

In case USD/JPY settles back above the 134.50 level, it will head towards the resistance at 135.10. A move above 135.10 will push USD/JPY towards the 135.75 level.

R1:134.50 – R2:135.10 – R3:135.75

S1:134.00 – S2:133.50 – S3:133.00

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