EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Retreats From Recent Highs Amid Profit-Taking

Key Insights

• GBP/USD hits new lows as BoE keeps rates unchanged, surprising analysts with its dovishness.
• USD/CAD’s attempt to break above 1.3520 falters as oil market rebound bolsters the Canadian dollar.
• USD/JPY retraces despite rising Treasury yields; fears of BoJ intervention limit long positions.

U.S. Dollar

U.S. Dollar Index pulls back as traders take some profits off the table near multi-month highs. Treasury yields are moving higher as traders react to Powell’s comments.

It remains to be seen whether U.S. Dollar Index will gain any downside momentum as Powell was rather hawkish during yesterday’s press conference.

EUR/USD

EUR/USD is mostly flat as traders digest Powell’s words. From a big picture point of view, EUR/USD may remain under pressure as ECB looks more dovish than Fed.

If EUR/USD stays below the 1.0670 level, it will head towards the next support, which is located in the 1.0520 – 1.0550 range.

GBP/USD

GBP/USD tested new lows after BoE left the interest rate unchanged at 5.25%. Analysts expected that BoE will raise the rate to 5.5%, so BoE was more dovish than expected.

In case GBP/USD settles below the support at 1.2300, it will head towards the next support level, which is located in the 1.2180 – 1.2200 range.

USD/CAD

USD/CAD made an attempt to settle above the resistance at 1.3500 – 1.3520 but lost momentum and pulled back. Oil markets rebound after yesterday’s pullback, which is bullish for Canadian dollar.

If USD/CAD settles above the resistance at 1.3520, it will head towards the next resistance level, which is located in the 1.3675 – 1.3700 range.

USD/JPY

USD/JPY pulled back despite rising Treasury yields. Traders are worried that BoJ will intervene if USD/JPY moves closer to the 150 level, so they are not ready to increase their long positions above 148.00.

From the technical point of view, USD/JPY remains stuck below the resistance at 148.00 – 149.00. At some point, profit-taking may lead to a material pullback.

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