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EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Jumps As Treasury Yields Rebound
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U.S. Dollar Index tests new highs as traders cut bets on dovish Fed after Thomas Barkin notes that rate hikes are still possible.
Key Insights
- EUR/USD pulled back towards 1.0900 as traders focused on rising Treasury yields.
- USD/CAD rebounded towards 1.3350 as demand for commodity-related currencies declined.
- USD/JPY climbed above 143.50 amid rising demand for the American currency.
U.S. Dollar
U.S. Dollar Index gains ground as traders react to ISM Manufacturing PMI report, which showed that ISM Manufacturing PMI improved from 46.7 in November to 47.4 in December. JOLTs Job Openings increased from 8.73 million to 8.79 million, compared to analyst consensus of 8.85 million. Hawkish comments from Fed’s Barkin provided additional support to U.S. dollar.
In case U.S. Dollar Index manages to settle above the 103.00 level, it will head towards the next resistance at 103.50 – 103.75.
EUR/USD
EUR/USD remains under pressure as traders focus on rising Treasury yields. The yield of 10-year Treasuries settled near the 4.00% level, providing additional support to the American currency.
In case EUR/USD stays below the 1.0925 level, it will head towards the next support level, which is located in the 1.0810 – 1.0830 range.
GBP/USD
GBP/USD made several attempts to settle back above the 1.2650 level but lost momentum and pulled back.
RSI remains in the moderate territory, so GBP/USD will have a good chance to gain additional downside momentum in case it manages to settle below the 1.2600 level.
USD/CAD
USD/CAD is moving higher despite the strong rebound in the oil markets as traders remain focused on the general strength of the American currency.
The nearest resistance for USD/CAD is located in the 1.3380 – 1.3410 range. A move above 1.3410 will push USD/CAD towards the next resistance at 1.3480 – 1.3500.
USD/JPY
USD/JPY rallied as traders focused on rising Treasury yields. USD/JPY remains sensitive to Treasury yields dynamics due to the ultra-dovish policy of the BoJ.
From the technical point of view, USD/JPY settled above the 50 MA and is moving towards the resistance at 144.65 – 145.00.
For a look at all of today’s economic events, check out our economic calendar.
About the Author
Vladimir Zernovauthor
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.
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