EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Pulls Back Ahead Of Fed Decision

Vladimir Zernov
Published: Sep 20, 2023, 16:26 GMT+00:00

Falling Treasury yields put pressure on the American currency.


In this article:

Key Insights

  • EUR/USD climbed above the 1.0700 level as traders reacted to Germany’s PPI report. 
  • GBP/USD rebounds from the sell-off caused by the UK inflation reports. 
  • USD/JPY failed to settle above the 148.00 level.

U.S. Dollar

DXY 200923 4h Chart

U.S. Dollar Index pulls back ahead of the Fed Interest Rate Decision, which will be released soon. Treasury yields are moving lower, and it looks that some bond traders want to bet on a less hawkish Fed.

The nearest support level for U.S. Dollar Index is located in the 104.45 – 104.70 range. If U.S. Dollar Index settles below 104.45, it will head towards the next support at 103.40 – 103.65.


EUR/USD 200923 4h Chart

EUR/USD moved above the 1.0700 level as traders prepared for the Fed decision. Germany’s PPI increased by 0.3% month-over-month in August, providing additional support to the European currency.

In case EUR/USD settles above the recent highs near 1.0760, it will head towards the resistance, which is located at 1.0835 – 1.0850.


GBP/USD 200923 4h Chart

GBP/USD rebounded after the sell-off, which was triggered by the release of UK inflation reports. UK Inflation Rate declined from 6.8% to 6.7%, while UK Core Inflation Rate decreased from 6.9% to 6.2%.

If GBP/USD manages to settle back above the 1.2400 level, it will head towards the nearest resistance, which is located in the 1.2470 – 1.2500 range.


USD/CAD 200923 4h Chart

USD/CAD continues its attempts to settle below the 1.3400 level despite the pullback in the oil markets as traders focus on the general weakness of the U.S dollar.

If USD/CAD declines below the support at 1.3370 – 1.3400, it will head towards the next support, which is located in the 1.3240 – 1.3260 range.


USD/JPY 200923 4h Chart

USD/JPY made an attempt to climb above the key 148.00 level but quickly lost momentum and pulled back.

Traders will wait for the Fed decision, which may have a significant impact on USD/JPY dynamics.

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

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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