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

By:
Vladimir Zernov
Published: Feb 1, 2023, 16:36 UTC

Traders prepare for the Fed Interest Rate Decision and the subsequent commentary from Fed Chair Jerome Powell.

U.S. Dollar

In this article:

Key Insights

  • EUR/USD managed to settle above the 1.0900 level. 
  • GBP/USD continues its attempts to settle below 1.2300.
  • USD/JPY is heading towards the 129 level. 

U.S. Dollar

DXY
DXY 010223 Daily Chart

U.S. dollar is moving towards multi-month lows ahead of the Fed decision. Today, traders focused on job market data.

ADP Employment Change report missed analyst expectations, while JOLTs Job Openings report was surprisingly strong.

At this point, it looks that some traders are ready to be that Fed’s commentary will not be hawkish today. Anyway, all traders should be prepared for fast moves after the release of the Fed Interest Rate Decision.

EUR/USD

EUR/USD
EUR/USD 010223 Daily Chart

EUR/USD gained upside momentum and moved towards multi-month highs. EU reported that Euro Area Inflation Rate declined from 9.2% in December to 8.5% in January, compared to analyst consensus of 9%. Euro Area Unemployment Rate remained unchanged at 6.6% in December, while analysts expected that it would decrease to 6.5%.

Tomorrow, ECB will announce its Interest Rate Decision, and traders bet that  ECB will stay hawkish despite the recent decline in inflation.

GBP/USD

GBP/USD
GBP/USD 010223 Daily Chart

GBP/USD continues its attempts to settle below the 1.2300 level as traders wait for the Fed decision. Tomorrow, BoE will release its Interest Rate Decision, so GBP/USD traders will be extremely busy in the next few days.

USD/CAD

USD/CAD
USD/CAD 010223 Daily Chart

USD/CAD received support near the 1.3300 level and is trying to gain upside momentum. Canada has recently reported that S&P 500 Global Manufacturing PMI increased from 49.2 in December to 51 in January, compared to analyst consensus of 51. The encouraging report did not provide support to the Canadian dollar.

Other commodity-related currencies are gaining ground in today’s trading session. AUD/USD moved towards the 0.7075 level, while NZD/USD settled near 0.6450.

USD/JPY

USD/JPY
USD/JPY 010223 Daily Chart

USD/JPY settled below the 130 level and is moving towards the support at 129. Traders bet that BoJ will have to be more hawkish in the upcoming months, despite its commitment to the current ultra-dovish policy.

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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