U.S. Dollar Pulls Back On Tariff Optimism: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

EUR/USD Rallied As Trump Would Study Trade Policy Before Imposing Tariffs

EUR/USD rallied as Donald Trump would not impose tariffs on his first day in the office. The tariff threat is the key bearish catalyst for the euro, so any improvements on this front provide support to the European currency. In the EU, traders had a chance to take a look at Producer Prices data from Germany. The report showed that PPI declined by -0.1% month-over-month in December, compared to analyst forecast of +0.3%.

Currently, EUR/USD is trying to settle above the resistance at 1.0420 – 1.0435. In case this attempt is successful, EUR/USD will move towards the next resistance, which is located in the 1.0515 – 1.0530 range.

GBP/USD Attempts To Settle Above 1.2300

GBP/USD gained strong upside momentum as traders reacted to Trump’s plans to study trade policies instead of imposing immediate tariffs.

GBP/USD moved above the 50 MA at 1.2230 and is trying to settle above the 1.2300 level. A move above 1.2300 will push GBP/USD towards the resistance at 1.2355 – 1.2370. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Retreats As Traders Buy Commodity-Related Currencies

USD/CAD pulled back amid rising demand for commodity-related currencies. Traders ignored the pullback in the oil markets and focused on Trump’s plans.

From the technical point of view, USD/CAD is trying to settle below the support at 1.4330 – 1.4350. If USD/CAD manages to settle below the 1.4330 level, it will move towards the next support level at 1.4100 – 1.4120.

USD/JPY Faced Strong Resistance At 156.00 – 156.50

USD/JPY did not manage to settle above the resistance at 156.00 – 156.50 and pulled back towards the 155.50 level.

If USD/JPY declines below 155.50, it will head towards the next support, which is located in the 153.50 – 154.00 range.

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