EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Ground Amid Rising Demand For Safe-Haven Assets

Key Insights

• EUR/USD declined below the 1.0900 level. 
• GBP/USD moved towards 1.2700 as the pullback continued. 
• USD/JPY tested new highs near the 144 level. 

U.S. Dollar

U.S. Dollar Index continues to rebound amid rising demand for safe-haven assets. The disappointing U.S. Manufacturing PMI report did not put pressure on the American currency.

From the technical point of view, the U.S. Dollar Index is moving towards the 103.25 – 103.45 resistance area. A move above 103.45 will open the way to the test of the next resistance area, which is located in the 104.50 – 104.70 range.

EUR/USD

EUR/USD pulled back as traders reacted to the weak PMI reports from the EU. Euro Area Manufacturing PMI declined from 44.8 in May to 43.6 in June, while Services PMI decreased from 55.1 to 52.4. Numbers below 50 show contraction.

EUR/USD settled back below the 1.0900 level, which is a major disappointment for the bulls. If EUR/USD stays below 1.0900, it will head towards the support at 1.0800 – 1.0825.

GBP/USD

GBP/USD continues to pull back at a moderate pace. UK Retail Sales exceeded analyst expectations, growing by 0.3% in May. However, the UK manufacturing sector remained under strong pressure, and UK Manufacturing PMI decreased from 47.1 in May to 46.2 in June.

From the technical point of view, GBP/USD remains stuck in the range between the support in the 1.2630 – 1.2660 area and the resistance in the 1.2820 – 1.2850 area.

USD/CAD

USD/CAD is currently trying to settle back above the resistance in the 1.3180 – 1.3210 range. Oil markets remain under pressure, which is bearish for the Canadian dollar and other commodity-related currencies.

While the general trend remains bearish, USD/CAD will have a chance to gain some upside momentum if it manages to settle above the 1.3210 level. A successful test of this level will push USD/CAD towards the next resistance in the 1.3240 – 1.3265 range.

USD/JPY

USD/JPY is moving higher despite the pullback in Treasury yields. Traders prepare for another rate hike from the Fed in July. The Fed’s policy remains the key driver for USD/JPY as the BoJ sticks to its ultra-dovish policy.

The daily chart indicates that USD/JPY may soon test the resistance in the 144.20 – 145.20 range. The current trend is strong but RSI has just entered into the overbought territory, so the risks of a pullback are rising.

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