EUR/USD, GBP/USD, NZD/USD, USD/JPY – Traders React To U.S. Economic Reports

Key Insights

• U.S. dollar is losing some ground against a broad basket of currencies after the release of U.S. economic data. 
• NZD/USD gained downside momentum as PM Ardern announced her decision to quit. 
• USD/JPY settled near the 128.50 level as volatility decreased after yesterday’s wild swings.

U.S. Dollar (DXY)

U.S. dollar is losing ground in choppy trading as traders react to the economic data from the U.S.

Building Permits declined by 1.6% month-over-month in December, while Housing Starts decreased by 1.4%. The decrease in Housing Starts was smaller than expected.

Meanwhile, Initial Jobless Claims report showed that 190,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 214,000. The report indicated that labor market remained in a good shape. Interestingly, the surprising strength of the labor market failed to provide material support to the U.S. dollar.

EUR/USD

EUR/USD settled near the 1.0800 level despite hawkish comments from the ECB President Lagarde.

EUR/USD made several attempts to settle above the resistance at 1.0870 in recent trading sessions, but these attempts yielded no results. At this point, it is obvious that EUR/USD will need additional catalysts to settle above this level.

GBP/USD

GBP/USD is currently trying to settle above the 1.2350 level. RSI remains in the moderate territory, so there is enough room to gain additional upside momentum in case the right catalysts emerge.

If GBP/USD settles above 1.2350, it will move towards the next material resistance near the 1.2400 level.

NZD/USD

NZD/USD pulled back below the 0.6400 level as Prime Minister Jacinda Ardern announced her decision to quit.

AUD/USD has also found itself under pressure and moved towards the 0.6900 level. Meanwhile, Canadian dollar managed to gain some ground against the U.S. dollar after yesterday’s pullback, and USD/CAD moved towards the 1.3475 level.

USD/JPY

USD/JPY settled near the 128.50 level as traders evaluated their next moves after the recent BoJ decision. While the BoJ did not change its yield control policy, some analysts believe that it will be forced to push the high end of the target range for the 10-year Japan government bonds to the 0.75% level. If traders decide that the probability of this scenario is rising, USD/JPY will move to new lows.

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