EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Ground After PMI Reports

Key Insights

• EUR/USD moved lower as the European manufacturing sector remained under significant pressure. 
• USD/CAD failed to settle above 1.3550 and pulled back below the 1.3500 level. 
• USD/JPY continued its attempts to settle above the key resistance level at 138.70.

U.S. Dollar

U.S. Dollar Index is trying to settle above the resistance at 103.50 after the release of PMI reports. Composite PMI exceeded analyst expectations but Manufacturing PMI slipped below the 50 level, highlighting the challenging situation in the manufacturing sector.

If the U.S. Dollar Index settles above 103.50, it will head towards the resistance at 103.75. A move above 103.75 will push the U.S. Dollar Index towards the resistance level at 104.10.

R1:103.50 – R2:103.75 – R3:104.10

S1:103.25 – S2:103.00 – S3:102.80

EUR/USD

EUR/USD pulled back as traders focused on the disappointing Euro Area Manufacturing PMI, which declined from 45.8 in April to 44.6 in May. Numbers below 50 show contraction.

In case EUR/USD declines below the support at 1.0760, it will head towards the next support level, which is located at 1.0730. A move below this level will push EUR/USD towards the support at 1.0700.

R1:1.0790 – R2:1.0820 – R3:1.0840

S1:1.0760 – S2:1.0730 – S3:1.0700

GBP/USD

GBP/USD made an attempt to settle below the 1.2400 level but lost momentum and rebounded towards 1.2420. In the UK, the situation in the manufacturing sector is also challenging as Manufacturing PMI declined from 47.8 in April to 46.9 in May.

In case GBP/USD climbs back above the 1.2440 level, it will head towards the resistance at 1.2460. A move above 1.2460 will open the way to the test of the next resistance level at 1.2500.

R1:1.2440 – R2:1.2460 – R3:1.2500

S1:1.2410 – S2:1.2370 – S3:1.2345

USD/CAD

USD/CAD pulled back below the 1.3500 level as oil markets tested weekly highs. Interestingly, other commodity-related currencies have remained under pressure in today’s trading session.

A successful test of the support at 1.3490 will push USD/CAD towards the next support level at 1.3450. If USD/CAD declines below this level, it will head towards the support level at 1.3410.

R1:1.3530 – R2:1.3565 – R3:1.3600

S1:1.3490 – S2:1.3450 – S3:1.3410

USD/JPY

USD/JPY tests the key resistance at 138.70 as Treasury yields are moving higher. Traders stay focused on U.S. debt ceiling negotiations, which will have a major impact on forex market dynamics.

If USD/JPY settles above 138.70, it will head towards the resistance at 139.60. On the support side, a move below 137.50 will open the way to the test of the support level at 137.00.

R1:138.70 – R2:139.60 – R3:140.50

S1:137.50 – S2:137.00 – S3:136.50

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