EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Retreats After PMI Reports

Key Insights

• EUR/USD moved higher as Euro Area Core Inflation Rate exceeded analyst expectations. 
• GBP/USD climbed back above the 1.2700 level as BoE left the interest rate unchanged. 
• USD/JPY made an attempt to settle below 146.00 as Treasury yields tested new lows. 

U.S. Dollar

U.S. Dollar Index pulls back as traders react to PMI reports. ISM Manufacturing PMI increased from 47.4 in December to 49.1 in January, while S&P Global Manufacturing PMI improved from 47.9 to 50.7. Numbers above 50 show expansion.

In case U.S. Dollar Index declines below the 103.00 level, it will head towards the next support, which is located in the 101.75 – 102.00 range.

EUR/USD

EUR/USD rebounds as traders react to the Euro Area inflation reports. Inflation Rate declined from 2.9% in December to 2.8% in January, while Core Inflation Rate decreased from 3.4% to 3.3%.

If EUR/USD climbs back above the 50 MA at 1.0860, it will head towards the nearest resistance at 1.0925 – 1.0950.

GBP/USD

GBP/USD is moving higher after BoE Interest Rate Decision. The Monetary Policy Committee voted 6 – 3 to maintain the rate at 5.25%. Interestingly, two members voted for a rate hike, while one member voted for a rate cut. The two hawkish members provided support to the British pound.

From the technical point of view, GBP/USD received strong support at 1.2650 – 1.2685 and remains stuck in a tight range.

USD/CAD

USD/CAD pulls back as traders focus on the rebound in the oil markets. Canada’s Manufacturing PMI increased from 45.4 in December to 48.3 in January, providing additional support to the Canadian dollar.

A move below the support at 1.3380 – 1.3410 will open the way to the test of the next support level at 1.3300 – 1.3320.

USD/JPY

USD/JPY tests new lows as traders focus on the pullback in Treasury yields.

In case USD/JPY declines below the 146.00 level, it will head towards the next support level at 144.65 – 145.00.

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