U.S. Dollar (DXY) Stabilizes After Recent Volatility

Key Insights

• U.S. dollar is mostly flat in today’s trading. 
• EUR/USD continues its attempts to settle above the 1.0000 level. 
• USD/CAD is facing strong resistance near 1.3200.

U.S. Dollar Index Settled In The 109.50- 110 Range

U.S. Dollar Index is swinging between gains and losses after the release of multiple economic reports from the U.S.

U.S. Retail Sales increased by 0.3% month-over-month in August, compared to analyst consensus of 0%. Initial Jobless Claims report indicated that 213,000 Americans filed for unemployment benefits in a week. Industrial Production declined by 0.2% month-over-month in August, while Manufacturing Production increased by 0.1%.

It looks that currency markets need some time to stabilize after volatile trading. Meanwhile, traders will continue to prepare for the Fed Interest Rate Decision, which will be released on September 21.

EUR/USD Tests Resistance At 1.0000

EUR/USD continues its attempts to settle back above the 1.0000 level.

Today, traders focused on the Euro Area Wage Growth report, which showed that wages increased by 4.1% year-over-year in the second quarter.

The report provided some support to euro as rising wages may push ECB to be more aggressive.

GBP/USD Remains Under Pressure

GBP/USD is trading near the 1.1500 level as the pound tries to stabilize after the recent sell-off. Concerns about the health of the UK economy remain the key bearish catalyst for the pound.

Tomorrow, GBP/USD traders will focus on the UK Retail Sales report, which is expected to show that UK Retail Sales declined by 0.5% month-over-month in August. In case the report is worse than expected, GBP/USD may find itself under more pressure.

USD/CAD Tested Resistance at 1.3200

The resistance level at 1.3200 remains the key obstacle on the way up for USD/CAD.

Currently, USD/CAD is trying to settled back above the resistance at 1.3180. In case this attempt is successful, it will move towards the key resistance level, which is located at 1.3200. A move above this level will push USD/CAD towards the next resistance at 1.3225.

On the support side, the nearest support level for USD/CAD is located at 1.3140. If USD/CAD declines below this level, it will head towards the support at 1.3110.

Meanwhile, AUD/USD and NZD/USD lack momentum in today’s trading. AUD/USD has settled near 0.6730, while NZD/USD is stuck near the 0.6000 level.

USD/JPY Is Trading Above 143 Despite Intervention Fears

USD/JPY has stabilized above the 143 level after yesterday’s sell-off, which was caused by worries about potential interventions from the BoJ.

There are no signs of such interventions today, but bulls remain cautious. Perhaps, USD/JPY will need to spend some time in the 143 – 144 range before it will be ready to get to another test of the key 145 level.

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