EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Pulls Back After Weak ADP Report

Key Insights

• EUR/USD rises despite a drop in Euro Area Retail Sales.
• GBP/USD advances on UK Services PMI surpassing expectations.
• USD/CAD climbs as oil markets experience a significant sell-off.

U.S. Dollar

U.S. Dollar Index pulls back as traders react to the ISM Services PMI report, which met analyst expectations. S&P Global Services PMI declined from 50.5 in August to 50.1 in September but remained in the positive territory.  ADP Employment Change report showed that private businesses added just 89,000 jobs in September, which was bearish for the U.S. dollar.

U.S. Dollar Index was overbought, so it’s not surprising to see that some traders decided to take profits off the table near multi-month highs.

EUR/USD

EUR/USD gains ground despite the weak Euro Area Retail Sales report, which showed that Retail Sales declined by 1.2% month-over-month in August.

In case EUR/USD climbs above the resistance at 1.0520 – 1.0550, it will head towards the next resistance level, which is located in the 1.0670 – 1.0700 range.

GBP/USD

GBP/USD moved higher as traders reacted to UK Services PMI report, which showed that Services PMI declined from 49.5 in August to 49.3 in September, compared to analyst consensus of 47.2.

A move above the resistance at 1.2180 – 1.2200 will open the way to the test of the next resistance level at 1.2370 – 1.2410.

USD/CAD

USD/CAD tested new highs as traders focused on the strong sell-off in the oil markets.

From the technical point of view, USD/CAD is moving towards the resistance at 1.3800 – 1.3830.

USD/JPY

USD/JPY stabilized near the 149.00 level as traders waited for the next moves from the BoJ after yesterday’s sell-off.

In the near term, the risk of additional interventions from the BoJ will remain the key catalyst for USD/JPY.

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