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 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 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 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 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.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.