EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Moves Higher As Rebound Continues

Key Insights

• EUR/USD settled below the 1.1200 level. 
• GBP/USD declined towards 1.2900 as traders reacted to UK inflation data. 
• USD/JPY moved closer to the psychologically important 140 level. 

U.S. Dollar

U.S. Dollar Index is moving higher after a successful test of the 100 level. Today, traders focused on the housing market data. Building Permits declined by 3.7% month-over-month in June, while Housing Starts decreased by 8%.

The U.S. Dollar Index formed a double bottom pattern on the 4h chart and gained upside momentum. A move above the 50 MA at 100.70 will open the way to the test of the resistance at 101.00 – 101.15.

EUR/USD

EUR/USD is moving lower as traders focus on the general strength of the U.S. dollar. The final reading of the Euro Area Inflation Rate report met analyst estimates, so the report did not have a material impact on currency dynamics.

In case EUR/USD settles below the support at 1.1170 – 1.1190, it will head towards the next support level, which is located at 1.1070 – 1.1095.

GBP/USD

GBP/USD gained downside momentum as traders reacted to the inflation data from the UK. Inflation Rate declined from 8.7% in May to 7.9% in June, compared to analyst consensus of 8.2%.

GBP/USD moved below the previous support level at 1.2970 – 1.3000 and is trying to settle below the 1.2900 level. In case this attempt is successful, it will head towards the support at 1.2820 – 1.2850.

USD/CAD

USD/CAD is mostly flat as traders wait for additional catalysts. From a big picture point of view, USD/CAD stabilized below the 1.3200 level.

If USD/CAD manages to settle below 1.3150, it will head towards the support in the 1.3090 – 1.3120 range. RSI is in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge.

USD/JPY

USD/JPY gains ground while Treasury yields stay mostly flat. It looks that traders believe that the recent pullback was too strong, so they are willing to bet on a rebound.

In case USD/JPY settles above the 50 MA at 139.65, it will move towards the resistance at 140.45 – 140.80.

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