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EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Tests New Highs As PPI Exceeds Estimates

By:
Vladimir Zernov
Published: Sep 14, 2023, 16:23 GMT+00:00

ECB rate hike did not provide any support to EUR/USD, which tested multi-month lows.

EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts

In this article:

Key Insights

  • U.S. Dollar Index scales heights as August PPI report registers a 0.7% MoM uptick, outpacing analysts’ +0.4% forecast.
  • ECB hikes rates from 4.25% to 4.5%, but stops short of signaling a peak in the rate cycle.
  • The British pound wilts not just due to the U.S. dollar’s strength, but also under the weight of a languid UK economy.

U.S. Dollar

DXY
DXY 140923 4h Chart

U.S. Dollar Index gains ground as traders react to the PPI report, which showed that producer prices increased by 0.7% month-over-month in August, compared to analyst consensus of +0.4%. The better-than-expected Retail Sales report provided additional support to the American currency.

From the technical point of view, U.S. Dollar Index settled above the previous resistance at 104.45 – 104.70 and is moving towards the next resistance level, which is located at 105.65 – 105.90.

EUR/USD

EUR/USD
EUR/USD 140923 4h Chart

EUR/USD tested new lows after ECB raised the interest rate from 4.25% to 4.5%, in line with the analyst consensus. ECB noted that it was too early to tell whether interest rates have peaked.

EUR/USD
EUR/USD 140923 Daily Chart

In case EUR/USD stays below the 1.0670 level, it will move towards the next support, which is located in the 1.0620 – 1.0650 range.

GBP/USD

GBP/USD
GBP/USD 140923 Daily Chart

GBP/USD moved lower as traders focused on the general strength of the U.S. dollar. The weakness of the UK economy serves as an additional bearish catalyst for GBP/USD.

If GBP/USD settles below the 1.2400 level, it will head towards the next support in the 1.2300 – 1.2330 range.

USD/CAD

USD/CAD
USD/CAD 140923 4h Chart

USD/CAD remains under pressure as oil markets test new highs, which is bullish for the Canadian dollar.

A successful test of the support at 1.3500 – 1.3520 will open the way to the test of the next support level in the 1.3370 – 1.3400 range.

USD/JPY

USD/JPY
USD/JPY 140923 4h Chart

USD/JPY pulls back despite rising Treasury yields. Traders are not ready to push USD/JPY above the resistance at 148.00 – 149.00.

A move below the 147.00 level will push USD/JPY towards the 146.00 level. Profit-taking may serve as an important catalyst for USD/JPY in the upcoming trading sessions as the pair is trading near multi-month highs.

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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