EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Moves Lower As Powell Sends Dovish Signals

U.S. Dollar

U.S. Dollar Index is losing ground as traders react to PPI data and Powell’s comments. PPI increased by 0.5% month-over-month in April, while Core PPI grew by 0.5%, Importantly, the previous report was revised from +0.2% to -0.1% for both PPI and Core PPI. Powell noted that PPI data was mixed due to revisions. He also signaled that a rate hike was an unlikely scenario.

A move below the 105.00 level will push U.S. Dollar Index towards the nearest significant support level, which is located in the 104.40 – 104.60 range.

EUR/USD

EUR/USD gains ground as traders react to the better-than-expected Euro Area ZEW Economic Sentiment Index report. The report indicated that Economic Sentiment improved from 43.9 in April to 47 in May, compared to analyst consensus of 46.1.

In case EUR/USD settles above the 1.0800 level, it will gain additional upside momentum and move towards the next resistance at 1.0870 – 1.0885.

GBP/USD

GBP/USD is moving higher as traders focus on UK Unemployment Rate data for March. The report showed that UK Unemployment Rate increased from 4.2% in February to 4.3% in March, in line with the analyst consensus.

If GBP/USD settles above the 1.2600 level, it will head towards the resistance at 1.2670 – 1.2700.

USD/CAD

USD/CAD is mostly flat as the positive impact of the rally in precious metals markets is offset by the pullback in the oil markets.

From the technical point of view, USD/CAD remains stuck in a range between the support at 1.3600 and the resistance at 1.3800.

USD/JPY

USD/JPY is slowly moving higher as traders stay focused on the fundamental weakness of the Japanese yen.

At this point, bulls are not worried about potential interventions from the BoJ. However, trading may get choppy if USD/JPY gets closer to the 158.00 level.

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