EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Pulls Back After Yesterday’s Rally

Key Insights

• EUR/USD is trying to rebound as traders react to the better-than-expected Euro Area Industrial Production report. 
• GBP/USD moved lower as UK inflation reports missed analyst expectations. 
• USD/JPY pulled back as Treasury yields declined.

U.S. Dollar

U.S. Dollar Index is losing some ground as traders react to the final reading of PPI report, which showed that PPI declined by 0.2% month-over-month in December, compared to analyst consensus of -0.1%.

The nearest support level for U.S. Dollar Index is located in the 104.35 – 104.55 range. A move below 104.35 will push U.S. Dollar Index towards the next support at 103.50 – 103.75.

EUR/USD

EUR/USD gains ground as traders focus on GDP data from the EU. Euro Area GDP Growth Rate was 0% in the fourth quarter, in line with the analyst consensus. Euro Area Industrial Production increased by 2.6% month-over-month in December, compared to analyst forecast of -0.2%.

If EUR/USD settles above the resistance at 1.0730 – 1.0750, it will move towards the next resistance level, which is located in the 1.0810 – 1.0830 range.

GBP/USD

GBP/USD is moving lower as traders react to UK inflation data. Inflation Rate remained unchanged at 4% in January, compared to analyst consensus of 4.2%. Core Inflation Rate was 5.1%, while analysts expected that it would increase to 5.2%.

In case GBP/USD declines below the support at 1.2500 – 1.2520, it will head towards the next support level at 1.2350 – 1.2380.

USD/CAD

USD/CAD is mostly flat despite the pullback in the oil markets, which was triggered by the bearish EIA report.

If USD/CAD settles above the 1.3550 level, it will head towards the nearest resistance, which is located in the 1.3600 – 1.3620 range.

USD/JPY

USD/JPY is losing some ground as Treasury yields move lower after yesterday’s rally.

From the technical point of view, USD/JPY is stabilizing above the important 150.00 level.

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