Traders believe that the Fed will make its last rate hike at the next meeting in July.
U.S. Dollar Index remains under pressure despite encouraging economic reports. CB Consumer Confidence, New Home Sales, and Durable Goods Orders exceeded analyst expectations but did not provide material support to the American currency.
From the technical point of view, U.S. Dollar Index is sliding towards the strong support area in the 102.00 – 102.15 range. A move below this range will indicate that the U.S. Dollar Index is ready to gain additional momentum.
EUR/USD gains ground as traders bet on additional rate hikes from the ECB. Currently, the markets expect that the ECB will raise the rate by 50 bps by September.
EUR/USD has already managed to settle above the 1.0935 level and is moving towards the 1.1000 level. A move above this level will open the way to the test of the resistance at 1.1070 – 1.1095.
GBP/USD has started to rebound after the recent pullback. Traders expect that the BoE will remain hawkish in the upcoming months.
From the technical point of view, GBP/USD is trying to settle above the 50 MA at 1.2755. In case this attempt is successful, GBP/USD will head towards the resistance in the 1.2820 – 1.2850 range.
USD/CAD rebounds from recent lows as traders react to Canada’s inflation report, which indicated that Inflation Rate declined from 4.4% in April to 3.4% in May, in line with the analyst consensus.
In case USD/CAD settles above 1.3210, it will head towards the next resistance level, which is located in the 1.3240 – 1.3265 range. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
USD/JPY tests new highs as Treasury yields rise. While the market expects that the Fed would stop after an additional 25 bps rate hike in July, BoJ’s ultra-dovish policy puts too much pressure on the Japanese yen.
Taking a look at the daily chart, a move above the resistance in the 144.20 – 145.20 range will push USD/JPY towards the next resistance level at 148.35 – 148.75.
For a look at all of today’s economic events, check out our economic calendar.
Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.