EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Tests Multi-Month Lows As Traders Stay Bearish

Key Insights

• EUR/USD climbed above the 1.1100 level as traders focused on falling Treasury yields. 
• GBP/USD tested multi-month highs as traders bet on dovish Fed. 
• USD/CAD was mostly flat as oil markets pulled back after the recent rally. 

U.S. Dollar

U.S. Dollar Index is losing ground as traders focus on the pullback in Treasury yields.

RSI has settled in the oversold territory, so the risks of a rebound are increasing. However, U.S. Dollar Index has a decent chance to test the nearest support at 100.50 – 100.80.

EUR/USD

EUR/USD tests new highs as traders focus on the general weakness of the U.S. dollar.

In case EUR/USD manages to settle above the resistance at 1.1125 – 1.1150, it will head towards the next resistance level at 1.1250 – 1.1275.

GBP/USD

GBP/USD  has also moved higher, supported by falling Treasury yields. Traders bet that Fed will start cutting rates in March 2024.

A move above the 1.2800 level will push GBP/USD towards the nearest resistance level at 1.2820 – 1.2850.

USD/CAD

USD/CAD settled near the 1.3200 level as oil markets pulled back after yesterday’s rally.

In case USD/CAD settles back above the 1.3200 level, it will head towards the nearest resistance, which is located in the 1.3275 – 1.3300 range. RSI is in the oversold territory, so there is plenty of room to gain additional upside momentum.

USD/JPY

USD/JPY pulled back as U.S. dollar tested new lows against a broad basket of currencies.

The nearest support level for USD/JPY is located in the 141.00 – 141.50 range. This support level has been tested several times and proved its strength. Most likely, USD/JPY will need additional catalysts to settle below 141.00.

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