EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Ground As Traders Focus On Hawkish Powell

Key Insights

• EUR/USD pulled back as traders reacted to the disappointing Consumer Confidence report from Germany. 
• GBP/USD moved below the 1.2650 level. 
• USD/JPY tested new highs despite falling Treasury yields. 

U.S. Dollar

U.S. Dollar Index gains ground despite the pullback in Treasury yields as traders remain focused on the hawkish Fed and the potential rate hikes at the next meetings.

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 push the U.S. Dollar Index towards the next resistance in the 104.50 – 104.75 range.

EUR/USD

EUR/USD pulled back as traders reacted to the disappointing Consumer Confidence data from Germany. GfK Consumer Confidence declined from -24.4 in May to -25.4 in June, compared to analyst consensus of -23.

In case EUR/USD manages to settle below the 1.0900 level, it will head towards the next support area, which is located in the 1.0800 – 1.0825 range.

GBP/USD

GBP/USD gained downside momentum and is trying to settle below the 1.2630 level. The BoE Governor Bailey said UK showed signs of persistent inflation, but these comments did not provide enough support to the Brisih pound.

RSI moved into the oversold territory while GBP/USD tested the support at 1.2630 – 1.2660, so the risks of a rebound increased.

USD/CAD

USD/CAD tests resistance in the 1.3240 – 1.3265 range, but it remains to be seen whether the U.S. dollar will gain more ground as the oil markets have started to rebound after the release of the EIA report.

USD/CAD needs to settle above 1.3265 to continue the rebound. In case USD/CAD climbs above 1.3265, it will head towards the next resistance in the 1.3360 – 1.3380 range.

USD/JPY

USD/JPY has recently tested new highs. While Treasury yields are moving lower in today’s trading session, the ultra-dovish policy of the BoJ remains the key negative catalyst for the Japanese yen.

Taking a look at the daily chart, USD/JPY has already moved into a strong resistance area, while RSI is in the overbought territory. In this light, USD/JPY may need additional catalysts to climb above the 145.20 level.

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