EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Slips After Factory Orders Report

Key Insights

• EUR/USD is heading towards the 1.0700 level. 
• The pullback in commodity markets put pressure on commodity-related currencies.
• USD/JPY settled below the 136 level as traders continued to take profits after the recent rally. 

U.S. Dollar

U.S. Dollar Index declined below 104.30 after the release of Factory Orders report. The report showed that Factory Orders declined by 1.6% in January, compared to analyst consensus of -1.8%. Factory Orders ex Transportation grew by 1.2%.

Treasury yields have rebounded from session lows, but this move did not provide support to the American currency as demand for safe-haven assets remained weak.

EUR/USD

EUR/USD moved above the 50 EMA and is trying to get to the test of the 1.0700 level.

Today, EUR/USD focused on the Euro Area Retail Sales report. The report showed that Euro Area Retail Sales increased by 0.3% month-over-month in January, compared to analyst consensus of 1%. The European economy remains under pressure but traders bet that the ECB will stay hawkish to fight inflation.

GBP/USD

GBP/USD made an attempt to settle above the 1.2050 level but failed to develop sufficient upside momentum and pulled back. In case GBP/USD settles above 1.2050, it will test the resistance at the 20 EMA at 1.2060. A move above the 20 EMA will open the way to the test of the resistance at the 50 EMA at 1.2085.

USD/CAD

USD/CAD settled back above the 1.3600 level as commodity markets pulled back.  The general weakness of the U.S. dollar did not provide material support to commodity-related currencies as traders focused on the pullback in commodity markets. AUD/USD declined towards the 0.6735 level, while NZD/USD settled below 0.6200.

USD/JPY

USD/JPY moved below the 136 level as traders continued to take profits after the recent rally. USD/JPY moved from 128 to 137 without any material pullback so the current stabilization looks natural. In case USD/JPY manages to settle above the 137 level, it will have a good chance to gain additional upside momentum and move closer to the psychologically important 140 level.

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