EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As Traders Stay Focused On Fed’s Rate Projections

U.S. Dollar

U.S. Dollar Index gains ground as traders react to PPI reports. The reports indicated that PPI declined by 0.2% month-over-month in May, compared to analyst consensus of +0.1%. Core PPI was 0.0%, compared to analyst forecast of +0.3%. At first glance, the reports were bearish for the U.S. dollar. However, U.S. dollar is moving higher against a broad basket of currencies as traders focus on Fed’s economic projections, which imply a single rate cut in 2024.

In case U.S. Dollar Index manages to climb above the 105.75 level, it will get to the test of the nearest significant resistance at 105.75 – 106.00.

EUR/USD

EUR/USD retreats as traders react to the Euro Area Industrial Production report, which indicated that Industrial Production declined by 0.1% month-over-month in April.

A move below the 1.0750 level opens the way to the test of the support at 1.0710 – 1.0725.

GBP/USD

GBP/USD pulls back as traders focus on general strength of the American currency.

In case GBP/USD settles below the 1.2750 level, it will head towards the nearest support, which is located in the 1.2670 – 1.2700 range.

USD/CAD

USD/CAD is moving higher as demand for commodity-related currencies declines amid pullback in precious metals markets.

If USD/CAD stays above the 1.3750 level, it will move towards the strong resistance level at 1.3785 – 1.3800.

USD/JPY

USD/JPY moved away from recent highs as traders focused on falling Treasury yields. The yield of 2-year Treasuries settled below the 4.70% level, while the yield of 10-year Treasuries declined towards 4.25%.

In case USD/JPY manages to settle below the 50 MA at 156.38, it move towards the support at June lows at 154.50 – 155.00. RSI is in the moderate territory, and there is plenty of room to gain additional downside momentum.

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