EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Retreats Despite Rising Treasury Yields

Key Insights

• EUR/USD is moving towards the 1.0900 level. 
• USD/CAD rebounds as oil markets pull back. 
• USD/JPY is trying to settle below the 144 level. 

U.S. Dollar

U.S. Dollar Index continues its attempts to settle above the resistance at 103.25 – 103.45 as traders react to economic reports from the U.S. ADP Employment Change report has exceeded analyst expectations, while JOLTs Job Openings declined below the 10 million level. Treasury yields tested new highs as traders bet on a more hawkish Fed.

In case the U.S. Dollar Index manages to settle above the 103.45 level, it will head towards the next resistance at 104.50 – 104.75. On the support side, the U.S. Dollar Index must get below the 50 MA at 103 to have a chance to gain downside momentum in the near term.

EUR/USD

EUR/USD gained some ground despite rising Treasury yields as the yields of the European government bonds have also gained strong upside momentum in today’s trading session.

From the technical point of view, EUR/USD settled in the 1.0825 – 1.0935 range and is slowly moving lower.

GBP/USD

GBP/USD gains some ground as the yield of UK 10-year bonds tests yearly highs at 4.70%. Traders should note that there was a major sell-off in the bond markets today, which may ultimately lead to volatility in the forex market.

GBP/USD did not manage to settle below the 50 MA at 1.2690, which was a bullish development. In case GBP/USD climbs above 1.2750, it will move towards the resistance in the 1.2820 – 1.2850 range.

USD/CAD

USD/CAD rallies as traders focus on the pullback in the oil markets. Other commodity-related currencies have also found themselves under pressure in today’s trading session.

RSI moved into the overbought territory at a time when USD/CAD tested resistance at 1.3360 – 1.3380, so the risks of a pullback have increased.

USD/JPY

USD/JPY is losing ground despite rising Treasury yields. It looks that Japanese yen is supported by growing demand for safe-haven assets.

The nearest material support level for USD/JPY is located in the 141.85 – 142.35 range, so USD/JPY has a good chance to gain downside momentum in case it settles below the 144 level.

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