EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Retreats After Weak GDP Report

Key Insights

• Weak U.S. economic reports have pushed the U.S. Dollar Index downward.
• Germany’s inflation numbers for August, slightly exceeding market expectations, have given the EUR/USD pair a bullish tilt.
• The GBP/USD pair takes advantage of weaker U.S. economic indicators, showing an upward trajectory.

U.S. Dollar

U.S. Dollar Index is losing ground as traders react to U.S. economic reports. ADP Employment Change report indicated that private businesses added 177,000 jobs in August, compared to anlayst consensus of 195,000. The second estimate of the second-quarter GDP Growth Rate showed that GDP Growth Rate was 2.1%, compared to analyst consensus of 2.4%.

In case U.S. Dollar Index stays below the 103.40 level, it will head towards the next support level, which is located in the 102.00 – 102.15 range.

EUR/USD

EUR/USD moved higher after the release of Germany’s inflation reports, which indicated that Inflation Rate declined from 6.2% in July to 6.1% in August, compared to analyst consensus of 6.0%.

The nearest resistance for EUR/USD is located in the 1.0950 – 1.0975 range. A move above 1.0975 will open the way to the test of the resistance at 1.1050 – 1.1070.

GBP/USD

GBP/USD has also moved higher as traders reacted to the weak economic reports from the U.S.

In case GBP/USD manages to settle above the resistance at 1.2725 – 1.2750, it will move towards the resistance at 1.2870 – 1.2900.

USD/CAD

USD/CAD pulled back as oil markets tested weekly highs after the release of the EIA report, which showed that crude inventories declined by 10.6 million barrels from the previous week.

If USD/CAD moves below the support at 1.3500 – 1.3520, it will head towards the next support level at 1.3430 – 1.3450.

USD/JPY

USD/JPY gains ground despite the pullback in Treasury yields. There are no bullish catalysts for the yen in the near term.

RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

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