EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As PCE Price Index Exceeds Expectations

U.S. Dollar

U.S. Dollar Index gains ground as traders react to the PCE Price Index report. The report showed that PCE Price Index increased from 2.6% in February to 2.7% in March, compared to analyst consensus of 2.5%. Core PCE Price Index grew from 2.6% to 2.8%, in line with analyst estimates. The reports indicate that inflationary pressures persist, which is bullish for the U.S. dollar as Fed will be forced to be more hawkish to fight inflation.

Currently, U.S. Dollar Index is trying to settle back above the resistance at 105.75 – 106.00. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 107.10 – 107.35 range.

EUR/USD

EUR/USD is losing ground as traders react to U.S. inflation data. Interestingly, Treasury yields are moving lower. However, this move does not provide support to EUR/USD.

If EUR/USD settles below the 50 MA at 1.0672, it will head towards the next support level, which is located in the 1.0600 – 1.0625 range.

GBP/USD

GBP/USD pulls back as traders focus on general strength of the U.S. dollar. The Fed may be more hawkish than BoE in the upcoming months, which is bearish for GBP/USD.

A successful test of the support at 1.2425 – 1.2450 will open the way to the test of the next support level, which is located in the 1.2310 – 1.2335 range.

USD/CAD

USD/CAD is moving higher as traders bet that higher-than-expected PCE Price Index data will put pressure on commodity markets, which will be bearish for the Canadian dollar.

In case USD/CAD climbs above the 50 MA at 1.3728, it will move towards the resistance at 1.3780 – 1.3800.

USD/JPY

USD/JPY rallied as traders reacted to the BoJ Interest Rate Decision. Japan’s central bank left the interest rate unchanged at 0.1% and did not show that it was ready to provide support to the Japanese yen.

As a result, traders bet that BoJ will not intervene unless USD/JPY tests the 160.00 level. It should be noted that RSI is in the extremely overbought territory, so the risks of a pullback are increasing.

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