EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Is Under Pressure After Powell’s Comments

Key Insights

• EUR/USD rebounded above the 1.0800 level. 
• USD/CAD settled near 1.3500 as oil markets pulled back from session highs. 
• USD/JPY declined as traders took some profits off the table after the recent rally. 

U.S. Dollar

U.S. Dollar Index pulled back as traders reacted to Jerome Powell’s comments. Powell said that the situation in the banking system was under control and added that Fed would not have to raise rates as much as previously expected.

If the U.S. Dollar Index settled below the 103 level, it will move towards the next support at 102.80. A successful test of this level will push the U.S. Dollar Index towards the support level at 102.50.

R1:103.25 – R2:103.50 – R3:103.75

S1:103.00 – S2:102.80 – S3:102.50

EUR/USD

EUR/USD rebounds from multi-week lows as traders bet on a less hawkish Fed. U.S. debt-ceiling talks were paused, which served as an additional bearish catalyst for the U.S. dollar.

In case EUR/USD settles above the resistance at 1.0820, it will head towards the 1.0840 level. A successful test of this level will push EUR/USD towards the next resistance at 1.0870.

R1:1.0820 – R2:1.0840 – R3:1.0870

S1:1.0790 – S2:1.0760 – S3:1.0730

GBP/USD

GBP/USD has also moved higher in today’s trading session as traders focused on the general weakness of the U.S. dollar.

In case GBP/USD settles above 1.2460, it will head towards the resistance at 1.2500. A move above 1.2500 will open the way to the test of the resistance at 1.2525.

R1:1.2460 – R2:1.2500 – R3:1.2525

S1:1.2440 – S2:1.2410 – S3:1.2370

USD/CAD

USD/CAD is mostly flat as oil markets pull back from session highs. Traders are worried about the fate of U.S. debt-ceiling negotiations.

A move below 1.3490 will push USD/CAD towards the support level at 1.3450. In case USD/CAD declines below this level, it will head towards the next support at 1.3410.

R1:1.3530 – R2:1.3565 – R3:1.3600

S1:1.3490 – S2:1.3450 – S3:1.3410

USD/JPY

USD/JPY pulled back as traders reacted to Powell’s comments. It should be noted that Treasury yields continue to move higher, so it remains to be seen whether this pullback will be sustainable.

In case USD/JPY settles below the 137.50 level, it will head towards the support at 137.00. On the upside, a move above 138.70 will push USD/JPY towards the resistance at 139.60.

R1:138.70 – R2:139.60 – R3:140.50

S1:137.50 – S2:137.00 – S3:136.50

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