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EUR/USD, GBP/USD, USD/CAD, USD/JPY – Canadian Dollar Gains Ground As BoC Raises Rates

By:
Vladimir Zernov
Published: Jun 7, 2023, 16:24 UTC

BoC noted that monetary policy was not sufficiently restrictive to push inflation back to the 2% target.

U.S. Dollar

In this article:

Key Insights

  • EUR/USD remains stuck near the 1.0700 level. 
  • USD/CAD tested new lows as BoC raised the interest rate to 4.75%. 
  • USD/JPY gained ground as Treasury yields tested new highs. 

U.S. Dollar

DXY
DXY 070623 Daily Chart

U.S. Dollar Index is mostly flat in volatile trading. The export-import data indicated that U.S. trade imbalance widened in April. Traders also focused on the dynamics of Treasury yields, which moved closer to recent highs.

From the technical point of view, U.S. Dollar Index has recently made several attempts to settle above the resistance at 104.10, but these attempts yielded no results.

R1:104.10 – R2:104.45 – R3:104.70

S1:103.75 – S2:103.50 – S3:103.20

EUR/USD

EUR/USD
EUR/USD 070623 Daily Chart

EUR/USD continues its attempts to settle above the 1.0700 level. While the ECB is expected to raise rates at the upcoming meetings, rising Treasury yields serve as a bearish catalyst for EUR/USD.

If EUR/USD settles back above 1.0700, it will move towards the resistance at 1.0730. On the support side, a move below 1.0670 will push EUR/USD towards the next resistance level at 1.0635.

R1:1.0700 – R2:1.0730 – R3:1.0750

S1:1.0670 – S2:1.0635 – S3:1.0605

GBP/USD

GBP/USD
GBP/USD 070623 Daily Chart

GBP/USD faced strong resistance near 1.2500 and pulled back. Today, traders focused on the Halifax House Price Index report, which showed that UK house prices remained unchanged in May, in line with the analyst consensus.

A move below the support at 1.2440 will push GBP/USD towards the next support level at 1.2400. If GBP/USD declines below this level, it will head towards the support at 1.2370.

R1:1.2470 – R2:1.2485 – R3:1.2510

S1:1.2440 – S2:1.2400 – S3:1.2370

USD/CAD

USD/CAD
USD/CAD 070623 Daily Chart

USD/CAD tested multi-week lows as traders reacted to the BoC decision. The Bank of Canada surprised markets, raising the interest rate from 4.5% to 4.75%.

In case USD/CAD settles below 1.3335, it will head towards the next support level at 1.3300. A move below this level will push USD/CAD towards 1.3275.

R1:1.3380 – R2:1.3410 – R3:1.3440

S1:1.3325 – S2:1.3300 – S3:1.3275

USD/JPY

USD/JPY
USD/JPY 070623 Daily Chart

USD/JPY gained ground as Treasury yields moved higher. However, it looks that USD/JPY is facing strong resistance near the important 140 level.

In case USD/JPY climbs above 140.50, it will head towards the resistance level at 141.60. On the support side, a move below 139.60 will push USD/JPY towards the next support at 138.70.

R1:140.50 – R2:141.60 – R3:142.25 

S1:139.60 – S2:138.70 – S3:137.50

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

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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