U.S. Dollar Dives As Treasury Boosts Buybacks Of Long-Dated Bonds: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Retreats As Traders Focus On Bond Buybacks

U.S. Dollar Index is under strong pressure as U.S. Treasury announced that it would boost buybacks of longer-dated government debt.

The yield of 30-year Treasuries pulled back towards the 5.20% level as bond traders reacted to the announcement. The yield of 10-year Treasuries declined below the 4.67% level.

The American currency is losing ground as debt buybacks pushed longer-term yields lower.

The nearest support level for U.S. Dollar Index is located in the 98.60 – 98.75 range. In case U.S. Dollar Index manages to settle below the 98.60 level, it will head towards the next support at 97.85 – 98.00. It should be noted that RSI is in the oversold territory, so the risks of a rebound are increasing.

EUR/USD Soars After U.S. Treasury Decides To Boost Bond Buybacks

EUR/USD rallied as traders focused on U.S. Treasury decision to buy back bonds. The moved showe that Bessent was worried that longer-dated bond market will get out of control.

EUR/USD is moving towards the resistance level at 1.1685 – 1.1700. If EUR/USD manages to settle above the 1.1700 level, it will head towards the next resistance level, which is located in the 1.1775 – 1.1790 range.

GBP/USD Rallies As Traders Focus On UK Inflation Data

GBP/USD gained ground as traders focused on general weakness of the American currency. Traders also had a chance to take a look at inflation data from the UK.

Inflation Rate increased from 2.6% in June to 2.9% in July, in line with analyst consensus. Core Inflation Rate remained unchanged at 2.6%, while analysts expected that it would drop to 2.9%.

USD/CAD Tests New Lows

USD/CAD pulled back as traders reacted to the strong rally in precious metals markets. Gold climbed towards the $4500 level, while silver moved towards $66.00. Other commodity-related currencies have also gained upside momentum in today’s trading session.

Currently, USD/CAD is trying to settle below the support level at 1.3825 – 1.3840. In case USD/CAD manages to settle below the 1.3825 level, it will head towards the next support, which is located in the 1.3735 – 1.3750 range. RSI has recently moved into oversold territory, but there is enough room to gain momentum in case the right catalysts emerge.

USD/JPY Moves Away From Weekly Highs

USD/JPY pulled back as traders focused on U.S. bonds’ buyback. The Japanese yen is fundamentally weak due to ultra-dovish policy of the Bank of Japan. Falling yields in the U.S. will put pressure on USD/JPY.

However, it remains to be seen whether buyback will provide major support to U.S. bond prices and pushes their yields to lower levels. Meanwhile, shorter-term U.S. Treasuries have found themselves under pressure. The yield of 2-year Treasuries climbed above the 4.19% level.

The nearest support level for USD/JPY is located in the 157.50 – 158.00 range. If USD/JPY manages to settle below the 157.50 level, it will head towards the next support level at 155.00 – 155.50.

On the upside, a move above the 50 MA at 159.10 will push USD/JPY towards the resistance level at 159.50 – 160.00.

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