EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Rebounds After Yesterday’s Sell-Off

Key Insights

• EUR/USD retreats as PMI reports show that the European economy remains under strong pressure. 
• GBP/USD pulled back towards the 1.2700 level. 
• USD/JPY remained stuck near 142.00 as traders waited for catalysts.

U.S. Dollar

U.S. Dollar Index gains ground as traders react to the better-than-expected Composite PMI report, which showed that Composite PMI improved from 50.7 in November to 51 in December.

In case U.S. Dollar Index settles above the 102.50 level, it will head towards the nearest resistance at 103.50 – 103.75.

EUR/USD

EUR/USD pulls back as traders react to the disappointing PMI reports from the EU. Euro Area Manufacturing PMI remained unchanged at 44.2 in December, while Services PMI declined from 48.7 to 48.1. Numbers below 50 show contraction.

If EUR/USD stays below the support at 1.0925 – 1.0950, it will head towards the next support level, which is located in the 1.0765 – 1.0790 range.

GBP/USD

GBP/USD is moving lower as traders take some profits off the table after the recent move. The disappointing Manufacturing PMI report served as an additional bearish catalyst for GBP/USD.

In case GBP/USD moves below the support at 1.2650 – 1.2685, it will head towards the next support at 1.2370 – 1.2410.

USD/CAD

USD/CAD tested new lows as the pullback continued. Other commodity-related currencies have also moved higher in today’s trading session.

If USD/CAD settles below the support at 1.3380 – 1.3410, it will head towards the next support at 1.3275 – 1.3300.

USD/JPY

USD/JPY is mostly flat as traders wait for additional catalysts after the recent moves.

From the technical point of view, it looks that USD/JPY found strong support in the 141.00 – 141.50 range.

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