EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Gains Ground After Williams’ Comments

Key Insights

• EUR/USD lost momentum and pulled back towards the 1.0720 level. 
• USD/CAD settled back above the 1.3400 level. 
• USD/JPY received support near the 20 EMA and rebounded towards the 131.50 level. 

U.S. Dollar

U.S. dollar gains ground against a broad basket of currencies as traders react to the comments of Fed’s Williams.

New York Federal Reserve Bank of New York President said that it was reasonable to expect a peak rate of 5% – 5.25%.

Treasury yields continue to move higher as bond traders believe that the Fed may have to push the federal funds rate above the 5% level to fight inflation. Rising Treasury yields are bullish for the U.S. dollar.

EUR/USD

EUR/USD settled near 1.0720 after an unsuccessful attempt to climb above the 1.0750 level. Traders stay focused on the outlook for Fed policy. Yesterday, EUR/USD found support near the 50 EMA at 1.0670. In case Treasury yields continue to move higher, EUR/USD will have a decent chance to settle below this support level.

GBP/USD

GBP/USD tried to climb above the 1.2100 level but lost momentum and pulled back towards the 1.2050 level. From a big picture point of view, GBP/USD is trying to stabilize after the recent pullback. In case this attempt is successful, GBP/USD will have a chance to test the 50 EMA at 1.2130.

USD/CAD

USD/CAD settled back above the 1.3400 level as the U.S. dollar moved higher against a broad basket of currencies.

Other commodity-related currencies have also found themselves under pressure in today’s trading session. AUD/USD declined below the 0.6950 level, while NZD/USD moved towards the 0.6300 level.

USD/JPY

USD/JPY found support near the 20 EMA at 130.65 and is trying to settle above the 131.50 level. Most likely, USD/JPY traders will stay focused on general dynamics of the U.S. dollar in the upcoming trading sessions.

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