EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Tests Multi-Month Highs As Inflation Exceeds Expectations

Vladimir Zernov
Published: Apr 10, 2024, 16:21 GMT+00:00

Key Points:

  • EUR/USD pulled back below the 1.0750 level as U.S. inflation reports exceeded analyst estimates.
  • USD/CAD moved towards 1.3700 as precious metals markets dived after the release of U.S. inflation data.
  • USD/JPY climbed towards the 153.00 level as traders focused on rising Treasury yields.

In this article:

U.S. Dollar

DXY 100424 4h Chart

U.S. Dollar Index rallied as traders reacted to U.S. inflation reports. Inflation Rate increased from 3.2% in February to 3.5% in March, compared to analyst consensus of 3.4%. Core Inflation Rate remained unchanged at 3.8%, while analysts expected that it would decline to 3.7%. Treasury yields rallied as bond traders bet on a more hawkish Fed. The yield of 2-year Treasuries climbed towards the 4.95% level, while the yield of 10-year Treasuries settled above 4.50%.

U.S. Dollar Index settled above the previous resistance at 104.40 – 104.60 and continues to move higher. A move above 105.50 will push U.S. Dollar Index towards the resistance at 105.75 – 106.00.


EUR/USD 100424 4h Chart

EUR/USD dived as traders focused on U.S. inflation data. Most likely, Fed will be more hawkish than ECB, which is bearish for the euro.

From the technical point of view, EUR/USD is moving towards the support at 1.0700 – 1.0720.


GBP/USD 100424 4h Chart

GBP/USD tests support at 1.2530 – 1.2550 as traders focus on U.S. inflation data and rising Treasury yields.

RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in the near term.


USD/CAD 100424 4h Chart

USD/CAD tests new highs as traders focus on general strength of the U.S. dollar. The pullback in precious metals markets put additional pressure on the Canadian dollar.

In case USD/CAD climbs above the 1.3700 level, it will head towards the next resistance, which is located in the 1.3780 – 1.3800 range.


USD/JPY 100424 4h Chart

USD/JPY tested new highs, driven by rising Treasury yields. There are no signs of interventions from the BoJ.

In case BoJ does not provide additional support to the Japanese yen in the near term, USD/JPY may gain additional momentum and move towards the 155.00 level. Traders should note that short covering may serve as a significant catalyst in the upcoming trading sessions.

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

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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