EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As Treasury Yields Test New Highs

Key Insights

• EUR/USD settled below 1.0550 after the release of the final reading of the Euro Area Inflation Rate report. 
• GBP/USD moved below 1.2150 as traders reacted to UK inflation data. 
• USD/CAD tested resistance at 1.3700 as traders sold commodity-related currencies. 

U.S. Dollar

U.S. Dollar Index gains ground as Treasury yields continue to move higher. Today, traders focused on Housing Starts and Building Permits reports. Housing Starts increased by 7% month-over-month in September, while Building Permits fell by 4.4%.

U.S. Dollar Index did not manage to gain downside momentum in recent trading sessions, and it looks that it is ready to test the nearest resistance at 106.90 – 107.20.

EUR/USD

EUR/USD declined after the final reading of the Euro Area Inflation Rate report met analyst estimates.

If EUR/USD settles below the support at 1.0520, it will head towards October lows near 1.0450.

GBP/USD

GBP/USD is also under pressure as traders focus on rising Treasury yields. UK Inflation Rate remained unchanged at 6.7% in September, compared to anlayst consensus of 6.6%. Interestingly, higher-than-expected inflation did not provide any support to GBP/USD as traders bet that BoE will not be hawkish due to the problems of the UK economy.

If GBP/USD settles below the 1.2150 level, it will head towards the nearest resistance, which is located in the 1.2000 – 1.2030 range.

USD/CAD

USD/CAD tests resistance at 1.3700 despite rising oil markets. Other commodity-related currencies are also moving lower in today’s trading session.

A move above 1.3700 will open the way to the test of the next resistance at 1.3800 – 1.3830.

USD/JPY

USD/JPY remains stuck below 150.00 as traders are worried about potential interventions from the BoJ.

The BoJ policy is the key catalyst for USD/JPY. The yen is fundamentally weak, but traders are afraid that BoJ will intervene if USD/JPY moves above the 150.00 level.

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