EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Tests New Highs

Key Insights

• EUR/USD is trying to settle below the 1.0750 level as the pullback continues. 
• USD/CAD moved towards the 1.3600 level amid a broad sell-off in commodity-related currencies. 
• USD/JPY managed to settle above the 139 level as Treasury yields moved higher. 

U.S. Dollar

U.S. Dollar Index is moving higher amid debt ceiling uncertainty. Treasury yields are rising, which is bullish for the American currency. Traders should be prepared for volatility as FOMC Minutes will be released today.

The nearest resistance level for the U.S. Dollar Index is located at 104.10. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 104.45. A move above 104.45 will push the U.S. Dollar Index towards the 104.75 level.

R1:104.10 – R2:104.45 – R3:104.75

S1:103.75 – S2:103.50 – S3:103.25

EUR/USD

EUR/USD remains under pressure as traders remain focused on the general strength of the U.S. dollar.

A move below the support at 1.0760 will push EUR/USD towards the next support level at 1.0730. In case EUR/USD declines below this level, it will head towards the support at 1.0700.

R1:1.0790 – R2:1.0820 – R3:1.0840

S1:1.0760 – S2:1.0730 – S3:1.0700

GBP/USD

GBP/USD is losing ground as traders react to inflation reports from UK. Inflation Rate declined from 10.1% in March to 8.7% in April, compared to analyst consensus of 8.2%. Core Inflation Rate increased from 6.2% to 6.8%, so the BoE will have to raise rates at the next meeting to fight inflation.

In case GBP/USD settles below the support at 1.2345, it will move towards the next support level at 1.2300. A successful test of this level will push GBP/USD towards the support at 1.2275.

R1:1.2370 – R2:1.2410 – R3:1.2440

S1:1.2345 – S2:1.2300 – S3:1.2275

USD/CAD

USD/CAD rallied amid a broad sell-off in commodity-related currencies, which was triggered by the strong sell-off in precious metals. Copper tested multi-month lows, serving as an additional bearish catalyst for commodity-related currencies.

If USD/CAD climbs above 1.3600, it will move towards the next resistance at 1.3640. A successful test of the resistance at 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 – S3:1.3490

USD/JPY

USD/JPY settled above the 138.70 level and continues to move higher as Treasury yields are rising.

The nearest resistance level for USD/JPY is located at 139.60. If USD/JPY gets above this level, it will head towards the next resistance at 140.50. A move above 140.50 will push USD/JPY towards the resistance at 141.60.

R1:139.60 – R2:140.50 – R3:141.60

S1:138.70 – S2:137.50 – S3:137.00

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