U.S. Dollar Gains Ground Ahead Of Fed Decision: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher As Traders Focus On Fed Decision

U.S. Dollar Index gains ground as traders wait for Fed Interest Rate Decision and react to economic reports.

Durable Goods Orders increased by +0.8% month-over-month in March, compared to analyst forecast of +0.5%. Housing Starts grew by +10.8% on a month-over-month basis in March, compared to analyst forecast of -0.7%. Building Permits declined by -10.8%, while analysts expected that they would decrease by -0.7%.

Currently, U.S. Dollar Index continues its attempts to settle above the resistance level at 98.85 – 99.00. In case U.S. Dollar Index manages to settle above the 99.00 level, it will move towards the next resistance, which is located in the 99.70 – 99.85 range.

EUR/USD Declines As Germany’s Inflation Rate Misses Estimates

EUR/USD is moving lower as traders focus on inflation data from Germany. Inflation Rate increased from +2.7% in March to +2.9% in April, compared to analyst forecast of +3%.

The nearest support level for EUR/USD is located in the 1.1665 – 1.1680 range. If EUR/USD declines below the 1.1665 level, it will move towards the next support level at 1.1585 – 1.1600.

GBP/USD Remains Stuck Near The 1.3500 Level

GBP/USD is moving lower as traders focus on the strong rally in the oil markets. Oil is up by almost 7% as traders bet on additional escalation in the Middle East.

From the technical point of view, GBP/USD continues its attempts to settle below the support at 1.3470 – 1.3485. If GBP/USD manages to settle below the 1.3470 level, it will move towards the next support at 1.3385 – 1.3400. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.

USD/CAD Pulls Back From Session Highs As BoC Keeps Rates Unchanged

USD/CAD is losing some ground as traders react to BoC Interest Rate Decision. The Bank of Canada left the interest rate unchanged at 2.25%, in line with analyst consensus.

Other commodity-related currencies were moving lower as traders focused on the rally in the oil markets. High oil prices will hurt global economy and may reduce demand for commodities.

In case USD/CAD settles below the 50 MA at 1.3665, it will head towards the nearest support level, which is located in the 1.3620 – 1.3635 range. On the upside, a successful test of the resistance at 1.3700 – 1.3715 will push USD/CAD towards the next resistance level at 1.3775 – 1.3790.

USD/JPY Tests The Key 160.00 Level

USD/JPY climbed above the psychologically important 160.00 level as traders prepared for Fed decision and monitored the situation in the oil markets.

High oil prices present a serious problem for Japan’s economy. Traders worry that BoJ will be forced to keep rates unchanged despite inflation to provide additional support to the economy.

There are no signs of interventions from the Bank of Japan. In case BoJ does not intervene to provide support to the Japanese yen, USD/JPY may gain significant upside momentum. It should be noted that USD/JPY will be sensitive to Fed decision and comments from Powell, so traders should be prepared for fast moves.

If USD/JPY stays above the 160.00 level, it will move towards the nearest resistance level, which is located in the 161.50 – 162.00 range. A move above the 162.00 level will signal that USD/JPY is ready to gain additional upside momentum.

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