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EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As ISM Services PMI Beats Expectations

By:
Vladimir Zernov
Published: Jun 5, 2024, 16:28 GMT+00:00

Key Points:

  • EUR/USD pulled back towards the 1.0850 level as traders reacted to U.S. PMI data.
  • USD/CAD moved above the 1.3700 level after BoC cut the rate from 5.00% to 4.75%.
  • USD/JPY rebounded above the 156.00 level.
EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts

In this article:

U.S. Dollar

DXY
DXY 050624 4h Chart

U.S. Dollar Index gains ground as traders react to the better-than-expected ISM Services PMI report. The report indicated that ISM Services PMI increased from 49.4 in April to 53.8 in May, compared to analyst forecast of 50.8. Numbers above 50 show expansion. Interestingly, Treasury yields moved lower after the release of the report. However, falling Treasury yields did not put pressure on the American currency.

U.S. Dollar Index is trying to settle above the nearest resistance at 104.40 – 104.60. In case U.S. Dollar Index manages to climb above the 104.60 level, it will move towards the next resistance level at 105.75 – 106.00.

EUR/USD

EUR/USD
EUR/USD 050624 4h Chart

EUR/USD is under pressure as traders react to the weaker-than-expected Euro Area Services PMI report.

A move below the 50 MA at 1.0854 will push EUR/USD towards the nearest support level, which is located in the 1.0785 – 1.0800 range.

GBP/USD

GBP/USD
GBP/USD 050624 4h Chart

GBP/USD pulls back as traders focus on general strength of the American currency. From a big picture point of view, GBP/USD needs additional positive catalysts to gain sustainable upside momentum and move above the 1.2800 level.

In case GBP/USD declines below the 50 MA at 1.2751, it will head towards the support at 1.2670 – 1.2700.

USD/CAD

USD/CAD
USD/CAD 050624 4h Chart

USD/CAD gains ground after BoC Interest Rate Decision. Canada’s central bank cut the rate from 5.00% to 4.75%, in line with analyst consensus.

If USD/CAD manages to settle above the 1.3700 level, it will head towards the nearest resistance at 1.3785 – 1.3800.

USD/JPY

USD/JPY
USD/JPY 050624 4h Chart

USD/JPY rebounds despite falling Treasury yields. The Japanese yen is fundamentally weak due to BoJ’s ultra-dovish policy, so traders used the recent pullback to increase their long positions in USD/JPY.

In case USD/JPY climbs back above the 50 MA at 156.67, it will head towards the key resistance at 158.00 – 158.50. Potential interventions from the BoJ will be the key risk for the bulls in case USD/JPY climbs towards the 158.00 level.

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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