EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Pulls Back Ahead Of Fed Decision

Key Insights

• U.S. Dollar Index tested support at 101.50 as ISM Services PMI exceeded expectations.
• EUR/USD moved towards the 1.1050 level after the release of the better-than-expected Euro Area Unemployment Rate report. 
• USD/JPY declined towards the 135 level as Treasury yields moved lower. 

U.S. Dollar

U.S. Dollar Index is trying to settle below the support at 101.50 while traders wait for the Fed decision. Today, traders also focused on the ISM Services PMI report, which exceeded analyst expectations.

If the U.S. Dollar Index settles below 101.50, it will move towards the support at 101.05. A move below this level will push the U.S. Dollar Index towards the support at 100.80. Traders should prepare for fast moves after the Fed decision.

R1:102.00 – R2:102.30 – R3:102.65

S1:101.50 – S2:101.05 – S3:100.80

EUR/USD

EUR/USD is moving higher as traders react to the better-than-expected Euro Area Unemployment Rate report, which indicated that Euro Area Unemployment Rate declined from 6.6% in February to 6.5% in March.

If EUR/USD settles above 1.1050, it will head towards the resistance at 1.1075. A successful test of the resistance at 1.1075 will push EUR/USD towards the 1.1100 level.

R1:1.1050 – R2:1.1075 – R3:1.1100

S1:1.1030 – S2:1.1000 – S3:1.0970

GBP/USD

GBP/USD is also moving higher as traders focus on the pullback in Treasury yields. Traders bet that Fed’s commentary would be more dovish due to the banking crisis in the U.S.

If GBP/USD gets above 1.2550, it will head towards the resistance at 1.2580. A move above 1.2580 will push GBP/USD towards the resistance at 1.2600.

R1:1.2550 – R2:1.2580 – R3:1.2600

S1:1.2525 – S2:1.2500 – S3:1.2460

USD/CAD

USD/CAD pulled back despite the sell-off in the oil markets as traders focused on the general weakness of the U.S. dollar.

If USD/CAD settles back below the 1.3610 level, it will head towards the support at 1.3570. A move below this level will open the way to the test of the support at 1.3550.

USD/JPY

USD/JPY declined towards the 135 level as Treasury yields moved lower. The dynamics of Treasury yields remain a key catalyst for USD/JPY due to the ultra-dovish policy of the BoJ.

A move below the support at 135.10 will push USD/JPY towards the next support at 134.50. If USD/JPY declines below this level, it will head towards the support at 134.00.

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