EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Pulled Back As PCE Price Index Fell To 2.6%

Key Insights

• EUR/USD pulled back after an unsuccessful attempt to settle above the 1.1035 level. 
• GBP/USD gained ground as traders focused on the strong Retail Sales report. 
• USD/JPY is trying to rebound from recent lows. 

U.S. Dollar

U.S. Dollar Index tested new lows as traders reacted to PCE Price Index report, which showed that PCE Price Index declined from 2.9% in October to 2.6% in November. However, the better-than-expected Michigan Consumer Sentiment report provided some support to the American currency.

In case U.S. Dollar Index settles below the support at 101.75 – 102.00, it will head towards the next support level, which is located in the 100.50 – 100.80 range.

EUR/USD

EUR/USD is mostly flat amid a lack of catalysts for the euro. Traders will have to wait until the next year for new economic reports.

EUR/USD made an attempt to settle above the resistance at 1.1035 but lost momentum and pulled back. A move below the 1.1000 level will open the way to the test of the nearest support at 1.0925 – 1.0950.

GBP/USD

GBP/USD gained some ground as traders focused on the better-than-expected UK Retail Sales report, which showed that Retail Sales increased by 1.3% month-over-month in November. The third-quarter GDP Growth Rate of +0.3% missed analyst expectations of +0.6%.

RSI remains in the moderate territory, so there is plenty of room to gain momentum, although it remains to be seen whether traders are ready for big moves ahead of Christmas.

USD/CAD

USD/CAD rebounded from session lows as traders reacted to Canada’s GDP report. The report indicated that GDP remained unchanged in October, compared to analyst consensus of +0.2%.

In case USD/CAD stays below the 1.3275 level, it will move towards the next support at 1.3125 – 1.3150.

USD/JPY

USD/JPY gains some ground as Treasury yields are moving higher.

Most likely, USD/JPY will need significant catalysts to move below the support at 141.00 – 141.50 as BoJ policy remains extremely dovish, which is bearish for the yen.

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