EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Rebounds From Session Lows As Composite PMI Exceeds Expectations

U.S. Dollar

U.S. Dollar Index is flat as traders react to flash readings of PMI reports. Manufacturing PMI increased from 50 in April to 50.9 in May, compared to analyst consensus of 50. Services PMI grew from 51.3 to 54.8, while analysts expected that it would remain unchanged. Treasury yields moved higher as traders focused on strong PMI data. However, rising Treasury yields did not provide sufficient support to the American currency.

In case U.S. Dollar Index manages to settle above the 105.00 level, it will head towards the resistance at 105.75 – 106.00.

EUR/USD

EUR/USD moved away from session highs as traders focused on PMI reports. Euro Area Manufacturing PMI improved from 45.7 in April to 47.4 in May, while Euro Area Services PMI remained unchanged at 53.3.

From the technical point of view, EUR/USD failed to settle above the 50 MA at 1.0845 and is moving towards the support level at 1.0785 – 1.0800.

GBP/USD

GBP/USD is swinging between gains and losses after the release of PMI reports. UK Manufacturing PMI improved from 49.1 in April to 51.3 in May, while UK Services PMI declined from 55.0 to 52.9.

A move below the support at 1.2670 – 1.2700 will open the way to the test of the next support, which is located in the 1.2530 – 1.2550 range.

USD/CAD

USD/CAD is moving higher as traders focus on the strong pullback in precious metals markets. Rising Treasury yields served as an additional positive catalyst for USD/CAD.

In case USD/CAD settles above the 1.3700 level, it will move towards the resistance at 1.3785 – 1.3800.

USD/JPY

USD/JPY tests new highs as traders focus on rising Treasury yields. There are no signs of interventions from the BoJ, but intervention risks increase as USD/JPY moves closer to the key resistance at 158.00 – 158.50.

If USD/JPY settles above 157.00, it will head towards the important 158.00 level. If BoJ does not intervene, USD/JPY may settle above 158.00 and head towards the 160.00 level.

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