EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Stays Flat Despite Falling Treasury Yields

Key Insights

• EUR/USD rebounded from multi-week lows and settled back above the 1.0700 level. 
• GBP/USD moved towards the 1.2400 level as the rebound continued. 
• USD/JPY pulled back from multi-month highs as traders focused on the pullback in Treasury yields. 

U.S. Dollar

U.S. Dollar Index is swinging between gains and losses as traders wait for the vote on the debt ceiling deal in Congress. Today’s economic reports, which included the housing market and consumer confidence updates, did not have a material impact on forex market dynamics.

In case the U.S. Dollar Index settles below the support at 104.10, it will move towards the next support level at 103.75. A move below this level will push the U.S. Dollar Index towards the support at 103.50.

R1:104.45 – R2:104.75 – R3:105.10

S1:104.10 – S2:103.75 – S3:103.50

EUR/USD

EUR/USD managed to rebound from multi-week lows despite the disappointing Euro Area Economic Sentiment report, which showed that Euro Area Economic Sentiment decreased from 99 in April to 96.5 in May.

A move above the resistance at 1.0730 will push EUR/USD towards the next resistance level, which is located at 1.0760. A successful test of this level will open the way to the test of the resistance at 1.0790.

R1:1.0730 – R2:1.0760 – R3:1.0790

S1:1.0700 – S2:1.0670 – S3:1.0630

GBP/USD

GBP/USD continues to rebound as traders focus on the pullback in Treasury yields.

A successful test of the resistance at 1.2410 will push GBP/USD towards the next resistance level, which is located at 1.2445. In case GBP/USD climbs above this level, it will move towards the resistance at 1.2470.

R1:1.2410 – R2:1.2445 – R3:1.2470

S1:1.2370 – S2:1.2345 – S3:1.2300

USD/CAD

USD/CAD is mostly flat despite the strong sell-off in the oil markets. Other commodity-related currencies are moving lower, although the pullback is not strong.

In case USD/CAD settles back above the 1.3600 level, it will move towards the resistance at 1.3640. A move above 1.3640 will push USD/CAD towards the 1.3665 level.

R1:1.3600 – R2:1.3640 – R3:1.3665

S1:1.3565 – S2:1.3530 – S3:1.3485

USD/JPY

USD/JPY pulled back from multi-month highs as Treasury yields moved lower. Traders bet that the debt ceiling deal will soon pass through Congress, and the situation in the debt markets would stabilize.

If USD/JPY declines below the support level at 139.60, it will head towards the next support at 138.70. A successful test of this support level will open the way to the test of the support at 137.50.

R1:140.50 – R2:141.60 – R3:142.25

S1:139.60 – S2:138.70 – S3:137.50

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