EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecast – U.S. Dollar Remains Stuck Near The Key Resistance Level

Key Insights

• Declining Treasury yields may challenge the Dollar Index’s upside momentum as the weekend nears.
• GBP/USD faces resistance, with UK Retail Sales in July reporting a more substantial decline than anticipated.
• Amid a rebounding oil market, USD/CAD remains stable.

U.S. Dollar

U.S. Dollar Index continues its attempts to settle above the resistance in the 103.40 – 103.65 range.

This resistance level has already been tested several times and proved its strength. Treasury yields are moving lower, so it remains to be seen whether U.S. Dollar Index will be able to gain upside momentum ahead of the weekend.

EUR/USD

EUR/USD is mostly flat as traders react to the final reading of the Euro Area Inflation Rate report, which indicated that Euro Area Inflation Rate declined from 5.5% in June to 5.3% in July.

From the technical point of view, EUR/USD pulled back towards the support at 1.0835 – 1.0850. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum.

GBP/USD

GBP/USD is trying to settle above the resistance at 1.2725 – 1.2750. Today, traders focused on the UK Retail Sales report, which showed that Retail Sales declined by 1.2% month-over-month in July, compared to analyst consensus of -0.5%.

In case GBP/USD fails to settle above the 1.2750 level, it will head towards the support in the 1.2590 – 1.2620 range.

USD/CAD

USD/CAD is mostly flat while oil markets continue to rebound. The recent increase in Treasury yields put pressure on the Canadian dollar, but stronger oil markets may provide some support to the Canadian currency.

In case USD/CAD stays above the 1.3520 level, it will head towards the next resistance, which is located in the 1.3650 – 1.3670 range.

USD/JPY

USD/JPY pulls back as traders continue to take profits after the strong rally. The pullback in Treasury yields served as an additional bearish catalyst for USD/JPY.

Taking a look at the daily chart, the pullback looks healthy. RSI has recently moved back into the moderate territory, so USD/JPY will have a good chance to gain additional upside momentum in case the right catalysts emerge.

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