EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Retreats Towards Session Lows

Key Insights

• EUR/USD moved back above the 1.0920 level after strong Industrial Production data from Germany. 
• GBP/USD declined amid profit-taking. 
• USD/JPY rebounded despite falling Treasury yields. 

U.S. Dollar

U.S. Dollar Index made an attempt to settle above the 102 level but lost momentum and pulled back. Initial Jobless Claims declined from 246,000 (revised from 198,000) to 228,000, compared to analyst consensus of 200,000. The surprising revision shows that Fed’s rate hikes have already put pressure on the job market, which is bearish for the U.S. dollar.

From the technical point of view, U.S. Dollar Index needs to settle above the 102 level to change the current trend. On the support side, a move below 101.50 will push the U.S. Dollar Index towards the next support at 101.05.

R1:102 – R2:102.50 – R3:102.80

S1:101.50 – S2:101.05 – S3:100.80

EUR/USD

EUR/USD moved back above the 1.0910 level. Today, traders focused on Germany’s Industrial Production report, which indicated that Industrial Production increased by 2% month-over-month in February, compared to analyst consensus of 0.1%.

The current trend remains strong, and EUR/USD bulls buy any pullback. A move above the 1.0940 level will push EUR/USD towards the recent highs near the 1.0970 level.

R1:1.0940 – R2:1.0970 – R3:1.1000

S1:1.0910 – S2:1.0885 – S3:1.0850

GBP/USD

GBP/USD pulls back as traders continue to take profits after the strong rally. The higher-than-expected Halifax House Price Index report did not provide any support to the British pound as traders focused on the disappointing Construction PMI report.

The current pullback looks healthy after the strong rally. However, GBP/USD may gain additional downside momentum in case it manages to settle below the 1.2390 level.

R1:1.2460 – R2:1.2500 – R3:1.2525

S1:1.2430 – S2:1.2390 – S3:1.2360

USD/CAD

USD/CAD made an attempt to settle above 1.3500 but lost momentum and pulled back. Traders reacted to the better-than-expected jobs reports from Canada. Oil markets continued consolidation, and it looks that Canadian dollar will need additional positive catalysts to gain more ground in the upcoming trading sessions.

USD/CAD has already made several attempts to settle above the resistance at 1.3480, but these attempts were not successful, which is worrisome for the bulls.

R1:1.3480 – R2:1.3520 – R3:1.3550

S1:1.3450 – S2:1.3410 – S3:1.3380

USD/JPY

USD/JPY rebounds after an unsuccessful attempt to settle below 130.90. Treasury yields are moving lower, but traders are still buying USD/JPY.

If USD/JPY manages to settle above the resistance at 131.85, it will head towards the next resistance level at 132.20. On the support side, USD/JPY needs to get below the 130.90 level to continue the pullback.

R1:131.50 – R2:131.85 – R3:132.20

S1:130.90 – S2:130.50 – S3:129.80

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