EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Tests Multi-Week Highs As Treasury Yields Rise

Key Insights

• EUR/USD tests support in the 1.0950 – 1.0975 range. 
• GBP/USD declined towards the 1.2750 level as the pullback continued. 
• USD/CAD rebounded towards 1.3300 amid a sell-off in commodity markets. 

U.S. Dollar

U.S. Dollar Index tests new highs as traders react to the ISM Manufacturing PMI report, which indicated that ISM Manufacturing PMI improved from 46 in June to 46.4 in July.

Currently, U.S. Dollar Index is trying to settle above the resistance at 102.00 – 102.15. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 103.40 – 103.65 range.

EUR/USD

EUR/USD moved lower as traders focused on the Germany’s Manufacturing PMI report, which showed that Manufacturing PMI declined from 40.6 in June to 38.8 in July. The manufacturing sector of Europe’s leading economy remains under strong pressure.

In case EUR/USD settles below the support at 1.0950 – 1.0975, it will head towards the next support level, which is located in the 1.0835 – 1.0850 range.

GBP/USD

GBP/USD is losing ground as traders react to the final reading of UK Manufacturing PMI report, which showed that UK Manufacturing PMI declined from 46.5 in June to 45.3 in July.

If GBP/USD settles below the support at 1.2725 – 1.2750, it will head towards the next support level, which is located at 1.2590 – 1.2620.

USD/CAD

USD/CAD moved higher as traders focused on rising Treasury yields. The pullback in commodity markets served as an additional bearish catalyst for the Canadian dollar.

If USD/CAD stays above the 1.3265 level, it will have a good chance to gain additional upside momentum and move towards the resistance in the 1.3360 – 1.3380 range.

USD/JPY

USD/JPY is moving higher as traders focus on rising Treasury yields, which remain the key bullish catalyst for USD/JPY due to the ultra-dovish policy of the BoJ.

The nearest resistance level for USD/JPY is located in the 144.65 – 145.00 range. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.

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