EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Pulls Back After Testing New Highs

Key Insights

• U.S. Dollar Index lost momentum and moved closer to the 104 level. 
• EUR/USD managed to get back towards the 50 EMA at 1.0675.
• USD/JPY tested the 135 level but failed to develop sufficient upside momentum and pulled back below 134.50.

U.S. Dollar

U.S. dollar pulled back after touching new highs as traders took some profits off the table ahead of the weekend.

The recent comments from Fed members were hawkish, which provided material support to the American currency.

However, it looks that technical factors played a material role in today’s pullback. It should be noted that Treasury yields have started to move lower, which was bearish for the U.S. dollar.

EUR/USD

EUR/USD received support near 1.0600 and rebounded towards the 50 EMA at 1.0675.

Today, traders focused on the Producer Prices report from Germany. The report indicated that Producer Prices declined by 1% month-over-month in January, compared to analyst consensus of -1.6%.

GBP/USD

GBP/USD has recently managed to climb back above the 1.2000 level as traders focused on the pullback in Treasury yields.

Earlier, GBP/USD traders had a chance to take a look at the UK Retail Sales report for January.

The report showed that Retail Sales increased by 0.5% on a month-over-month basis, while analysts expected that they would decline by 0.3%. The better-than-expected report indicated that the situation in the UK economy was not as bad as previously feared.

USD/CAD

USD/CAD is trying to settle above the 1.3500 level amid a strong pullback in the oil markets. RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

Other commodity-related currencies have also moved lower today. AUD/USD declined towards the 0.6850 level, while NZD/USD settled near 0.6230.

USD/JPY

USD/JPY made an attempt to settle above the psychologically important 135 level as the strong rebound continued. The recent pullback in Treasury yields has put some pressure on USD/JPY, but the current upside trend remains strong as the BoJ sticks to its ultra-dovish policy at a time when the Fed is raising rates.

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