EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As Traders Cut Bets On Dovish Fed

Key Insights

• EUR/USD pulled back below 1.0900 as traders focused on rising Treasury yields. 
• USD/CAD settled above 1.3450 as demand for commodity-related currencies declined. 
• USD/JPY tested the resistance at 147.00 – 147.50.

U.S. Dollar

U.S. Dollar Index is moving higher as traders reduce their bets on rate cuts. The crisis in Red Sea may boost inflation and force the Fed to hold rates steady.

The nearest resistance level for U.S. Dollar Index is located in the 103.50 – 103.75 range. A move above 103.75 will push U.S. Dollar Index towards the resistance at 104.35 – 104.55.

EUR/USD

EUR/USD tests new lows as traders react to the Euro Area ZEW Economic Sentiment Index report, which showed that Economic Sentiment declined from 23 in December to 22.7 in January.

In case EUR/USD styas below the 1.0900 level, it will head towards the nearest support at 1.0810 – 1.0830.

GBP/USD

GBP/USD is trying to settle below the support at 1.2650 – 1.2685 as traders focus on general dynamics of the American currency.

A successful test of the support at 1.2650 – 1.2685 will push GBP/USD towards the next support level at 1.2500 – 1.2520.

USD/CAD

USD/CAD gains some ground as traders monitor the choppy dynamics of the oil markets. Other commodity-related currencies have found themselves under material pressure in today’s trading session.

If USD/CAD settles above the resistance at 1.3480 – 1.3500, it will move towards the next resistance level at 1.3590 – 1.3620.

USD/JPY

USD/JPY tests new highs as traders focus on rising Treasury yields. The yield of 2-year Treasuries settled at 4.20%, while the yield of 10-year Treasuries climbed above the 4.00% level.

A move above the resistance at 147.00 – 147.50 will push USD/CAD towards the next resistance level at 149.50 – 150.00.

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