EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Tests New Lows After PPI Report

By:

Vladimir Zernov

Published: Jul 13, 2023, 16:09 GMT+00:00

Traders bet on a less hawkish Fed as inflation slows down.

Key Insights

EUR/USD moved towards the 1.1200 level as traders reacted to U.S. PPI data.
GBP/USD rallied towards the 1.3100 level.
USD/CAD made an attempt to settle below 1.3100 as oil prices tested new highs.

U.S. Dollar

DXY 130723 4h Chart

U.S. Dollar Index remains under strong pressure as traders react to the Producer Prices report, which showed that PPI increased by 0.1% month-over-month in June. Analysts expected that PPI would grow by 0.2%. Together with yesterday’s inflation reports, PPI indicates that inflation is slowing down.

DXY 130723 Daily Chart

RSI is in the oversold territory on both 4h and daily charts, so the risks of a rebound are growing.

EUR/USD

EUR/USD 130723 4h Chart

EUR/USD tested new highs as traders reacted to PPI data from the U.S. In the EU, Industrial Production increased by 0.2% month-over-month in May. This report did not have a material impact on currency dynamics.

EUR/USD 130723 Daily Chart

It remains to be seen whether EUR/USD will be able to settle above the 1.1200 level as RSI moved into the overbought territory.

GBP/USD

GBP/USD 130723 4h Chart

GBP/USD has also managed to gain strong momentum today. UK GDP declined by 0.1% month-over-month in May, compared to analyst consensus of -0.3%.

GBP/USD 130723 Daily Chart

The technical picture in GBP/USD is similar to EUR/USD. The current trend is strong but RSI has already settled in the overbought territory, which increases the risk of a pullback.

USD/CAD

USD/CAD 130723 4h Chart

USD/CAD tested support at 1.3090 – 1.3120 as oil markets moved to new highs. The general weakness of the U.S. dollar served as an additional bearish catalyst for USD/CAD.

RSI is in the extremely oversold territory so the risks of a rebound are increasing. In case USD/CAD fails to settle below 1.3090, it will move towards the nearest resistance at 1.3180 – 1.3210.

USD/JPY

USD/JPY 130723 4h Chart

USD/JPY is trying to settle below the support at 138.50 – 138.80 as traders remain focused on the pullback in Treasury yields.

If USD/JPY stays below the 138.50 level, it will head towards the next support in the 137.50 – 137.70 range.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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