EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Stays Strong As ISM Services PMI Exceeds Expectations
- U.S. dollar tests new highs, supported by the strong ISM Services PMI report.
- EUR/USD retreats as Germany’s Factory Orders decline by 11.7% in July.
- USD/JPY is mostly flat as bulls are afraid of BoJ interventions.
From the technical point of view, U.S. Dollar Index settled above the previous resistance at 104.40 – 104.70 and is moving towards the next resistance level, which is located in the 105.65 – 105.90 range.
EUR/USD tested new lows as traders reacted to the Euro Area Retail Sales report, which showed that Retail Sales declined by 0.2% month-over-month in July. Germany’s Factory Orders decreased by 11.7% in July, highlighting the challenging situation in Europe’s leading economy.
RSI is in the oversold territory, so the risks of a rebound are increasing. However, there is enough room to gain additional downside momentum in case the right catalysts emerge.
GBP/USD tested the 1.2500 level as traders focused on the general strength of the U.S. dollar.
The pullback continues, and it remains to be seen whether GBP/USD will find enough support in the 1.2470 – 1.2500 range as RSI remains in the moderate territory.
USD/CAD is moving higher despite the continuation of the rally in the oil markets, which was triggered by Saudi Arabia’s decision to maintain voluntary production cuts until the end of the year.
Currently, USD/CAD is trying to settle above the resistance in the 1.3650 – 1.3670 range. A move above 1.3670 will provide USD/CAD with an opportunity to gain additional upside momentum.
USD/JPY is mostly flat despite rising Treasury yields. It looks that bulls are worried that BoJ will intervene if USD/JPY moves above the resistance in the 148.00 – 149.00 range.
In the near term, potential interventions may serve as the key catalyst for USD/JPY. However, USD/JPY will have a chance to climb above the 149.00 level if Treasury yields continue to move higher.
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