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EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Stays Strong As Debt Ceiling Talks Drag On

By:
Vladimir Zernov
Published: May 25, 2023, 16:20 UTC

Traders have mostly ignored the U.S. economic reports and remained focused on the key catalyst.

U.S. Dollar

In this article:

Key Insights

  • EUR/USD pulled back towards the 1.0700 level as traders focused on the weak economic data from Germany. 
  • USD/CAD gained more ground as the sell-off in commodity-related currencies continued. 
  • USD/JPY moved towards the psychologically important 140 level. 

U.S. Dollar

DXY
DXY 250523 Daily Chart

U.S. Dollar Index tests new highs as debt ceiling negotiations continue. Today’s GDP and Pending Home Sales report had little impact on currency dynamics as traders remained focused on the key catalyst.

In case U.S. Dollar Index settles above the resistance at 104.45, it will head towards the next resistance level at 104.75. A move above this level will push the U.S. Dollar Index towards the resistance at 105.10.

R1:104.45 – R2:104.75 – R3:105.10

S1:104.10 – S2:103.75 – S3:103.50

EUR/USD

EUR/USD
EUR/USD 250523 Daily Chart

EUR/USD tested new lows as traders reacted to the weak economic data from Germany. GDP declined by 0.3% in the first quarter while Consumer Condidence decreased from -25.8 to -24.2.

If EUR/USD manages to settle below the support level at 1.0730, it will move towards the next support at 1.0700. A successful test of the support at 1.0700 will push EUR/USD towards the support level at 1.0670.

R1:1.0760 – R2:1.0790 – R3:1.0820

S1:1.0730 – S2:1.0700 – S3:1.0670

GBP/USD

GBP/USD
GBP/USD 250523 Daily Chart

GBP/USD has also tested new lows as the pullback continued. Traders stay focused on the U.S. debt ceiling drama and buy the safe-haven U.S. dollar.

If GBP/USD manages to settle below the 1.2300 level, it will head towards the support at 1.2275. A move below 1.2275 will push GBP/USD towards the 1.2240 level.

R1:1.2345 – R2:1.2370 – R3:1.2410

S1:1.2300 – S2:1.2275 – S3:1.2240

USD/CAD

USD/CAD
USD/CAD 250523 Daily Chart

USD/CAD continues to move higher amid a broad sell-off in commodity-related currencies.

A successful test of the resistance at 1.3640 will push USD/CAD towards the next resistance level at 1.3665. If USD/CAD climbs above this level, it will move towards the resistance at 1.3695.

R1:1.3640 – R2:1.3665 – R3:1.3695

S1:1.3600 – S2:1.3565 – S3:1.3530

USD/JPY

USD/JPY
USD/JPY 250523 Daily Chart

USD/JPY gained more ground as traders remained focused on rising Treasury yields. In case Treasury yields continue to move higher, USD/JPY will have a good chance to settle above the psychologically important 140 level.

If USD/JPY climbs above the resistance at 140.50, it will move towards the next resistance level at 141.60. A successful test of this level will open the way to test of the resistance at 142.25.

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.

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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