EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground After Powell’s Testimony

U.S. Dollar

U.S. Dollar Index gains ground as traders react to Powell’s comments. Fed Chair said that Fed’s next move was unlikely to be a rate hike, but traders were ready to bet on dollar’s rebound after the recent pullback. Treasury yields are moving higher, providing additional support to the American currency.

In case U.S. Dollar Index climbs above the 50 MA at 105.40, it will head towards the next resistance, which is located in the 105.75 – 106.00 range.

EUR/USD

EUR/USD is moving lower as traders focus on rising Treasury yields and Powell’s comments. There are no important economic reports scheduled to be released in the EU today, so traders will stay focused on general market sentiment.

In case EUR/USD declines below the nearest support at 1.0785 – 1.0800, it will head towards the next support level at 1.0710 – 1.0725.

GBP/USD

GBP/USD is losing ground as traders react to BRC Retail Sales Monitor, which indicated that retail sales declined by 0.5% year-over-year in June.

A move below the support at 1.2780 – 1.2800 will open the way to the test of the next support level at 1.2670 – 1.2700.

USD/CAD

USD/CAD is mostly flat despite the pullback in the oil markets. Other commodity-related currencies lack dynamics in today’s trading session.

From the technical point of view, USD/CAD needs to settle back above the 50 MA at 1.3663 to have a chance to gain sustainable upside momentum.

USD/JPY

USD/JPY is moving back towards recent highs. The pullback was quickly bought, and traders focused on the ultra-dovish policy of the BoJ.

At this point, it is obvious that Japan’s central bank did not try to defend the 160.00 level. It remains to be seen whether BoJ will intervene in case USD/JPY tests new highs. A successful test of the resistance at 161.50 – 162.00 will push USD/JPY towards the 165.00 level.

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