EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Pulls Back As Manufacturing PMI Drops Below 50

U.S. Dollar

U.S. Dollar Index pulls back as traders react to PMI reports. Manufacturing PMI declined from 51.6 in June to 49.5 in July, compared to analyst consensus of 51.7. Numbers below 50 show contraction. Services PMI increased from 55.3 to 56, while analysts expected that it would drop to 55. Today, traders also had a chance to take a look at the New Home Sales report. The report showed that New Home Sales declined by 0.6% month-over-month in June, compared to analyst forecast of +3.5%.

In case U.S. Dollar Index settles below the 50 MA at 104.21, it will move towards the nearest support level at 103.50 – 103.75.

EUR/USD

EUR/USD is mostly flat as traders react to PMI data. Euro Area Manufacturing PMI declined from 45.8 to 45.6, while Services PMI decreased from 52.8 to 51.9. Both reports missed analyst expectations.

If EUR/USD settles back below the 1.0850 level, it will move towards the nearest support at 1.0785 – 1.0800.

GBP/USD

GBP/USD gains some ground as traders focus on the better-than-expected UK Manufacturing PMI report, which showed that Manufacturing PMI increased from 50.9 to 51.8, compared to analyst consensus of 51.1.

A move above the 50 MA at 1.2951 will open the way to the test of the resistance at 1.2980 – 1.3000.

USD/CAD

USD/CAD made an attempt to settle above the 1.3800 level as traders reacted to BoC Interest Rate Decision. BoC cut the interest rate from 4.75% to 4.50%, in line with analyst expectations.

In case USD/CAD manages to settle above 1.3800, it will head towards the next resistance, which is located in the 1.3880 – 1.3900 range.

USD/JPY

USD/JPY tests new lows amid reports indicating that BoJ would think about a rate hike at the meeting next week. In addition, BoJ is expected to halve bond purchases in the upcoming years.

In case USD/JPY stays below the 153.50 level, it will head towards the next support, which is located in the 151.50 – 152.00 range.

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