EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Tests Multi-Week Lows As Treasury Yields Pull Back

Key Insights

• EUR/USD rallied as traders reacted to the ECB Interest Rate Decision. 
• GBP/USD tested multi-month highs. 
• USD/CAD declined towards the support support level amid rising demand for commodity-related currencies. 

U.S. Dollar

U.S. Dollar Index tested new lows as Treasury yields declined. Retail Sales increased by 0.3% month-over-month in May, exceeding the analyst forecasts of -0.1%.

The U.S. Dollar Index is trying to settle below the support area in the 102.25 – 102.55 range. RSI has already entered into the oversold territory, which increases the risk of a rebound from current levels.

EUR/USD

EUR/USD rallied after the ECB raised rates by 25 bps. The hawkish central bank provided material support to the European currency.

In case EUR/USD manages to sette above the resistance below the 1.0950 level, it will have a good chance to climb above 1.1000, although it should be noted that the current move has already pushed EUR/USD into the overbought territory.

GBP/USD

GBP/USD has also gained strong upside momentum as traders focused on falling Treasury yields.

Traders may soon decide to take some profits off the table as RSI has moved into the overbought territory.

USD/CAD

USD/CAD pulled back as WTI oil climbed above the $70 level. Other commodity-related currencies are also moving higher.

USD/CAD is currently testing a strong support level which has served as the base for a strong rebound in late 2022. A move below this level will signal that USD/CAD is ready to develop strong downside momentum.

USD/JPY

USD/JPY  pulled back from recent highs as Treasury yields moved lower. Traders remain cautious ahead of tomorrow’s BoJ Interest Rate Decision.

In case USD/JPY settles below 140.30, it will head back into the recent trading range and may move closer to the support area below the 139 level.

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