EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As Traders Bet On Hawkish Fed

Key Insights

• EUR/USD tested new lows near the 1.0800 level. 
• GBP/USD pulled back below 1.2700 as traders have started to prepare for Fed decision, which will be released on Wednesday. 
• USD/JPY declined towards 147.50, driven by falling Treasury yields. 

U.S. Dollar

U.S. Dollar Index is moving higher as traders start to prepare for the Fed Interest Rate Decision, which will be released on Wednesday.

In case U.S. Dollar Index settles above the 103.75 level, it will move towards the next resistance, which is located in the 104.35 – 104.55 range.

EUR/USD

EUR/USD tests new lows as traders reduce their bets on dovish Fed. FedWatch Tool indicates that the probability of a Fed rate hike in March has dropped below 50%, which is bullish for the American currency.

A successful test of the support at 1.0810 – 1.0830 will open the way to the test of the next support level at 1.0730 – 1.0750.

GBP/USD

GBP/USD is also moving lower as traders focus on general strength of the U.S. dollar.

From the technical point of view, GBP/USD needs to settle below the 1.2650 level to gain additional downside momentum.

USD/CAD

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

In case USD/CAD climbs back above the 1.3450 level, it will head towards the resistance at 1.3480 – 1.3500.

USD/JPY

USD/JPY is moving lower as traders focus on the pullback in Treasury yields. The yield of 2-year Treasuries settled below the 4.35% level, while the yield of 10-year Treasuries moved towards 4.10%.

If USD/JPY declines below the support at 147.00 – 147.50, it will head towards the next support level, which is located in the 144.65 – 145.00 range.

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