U.S. Dollar Gains Ground Amid Sell-Off In U.S. Equity Markets: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Rebounds From Session Lows

U.S. Dollar Index gains some ground as traders focus on the rebound in Treasury yields. The yield of 2-year Treasuries climbed above the 4.61% level, while the yield of 10-year Treasuries settled near 4.95%. The sell-off in U.S. equity markets provided some support to U.S. dollar as demand for safe-haven assets increased.

U.S. Dollar Index failed to settle below the support level at 101.50 – 101.65 and rebounded towards the 50 MA at 101.92. In case U.S. Dollar Index settles above the 50 MA, it will head towards the nearest resistance, which is located in the 102.35 – 102.50 range. A successful test of this level will open the way to the test of the next resistance at 103.15 – 103.30.

EUR/USD Retreats As Germany’s Inflation Rate Drops To 2.8%

EUR/USD pulled back despite the better-than-expected Euro Area GDP Growth Rate report. The report showed that Euro Area GDP Growth Rate was +1.3% in the third quarter, compared to analyst forecast of +1.1%.

Traders also had a chance to take a look at inflation data from Germany. Inflation Rate declined from 3.3% in September to 2.8% in October, compared to analyst forecast of 3%.

Currently, EUR/USD is trying to settle below the 1.1150 level. In case this attempt is successful, EUR/USD will head towards the next support, which is located in the 1.1100 – 1.1115 range.

GBP/USD Tests New Highs

GBP/USD gains ground as rally continues. UK budget plan served as the key positive catalyst for the British pound.

From the technical point of view, GBP/USD attempts to settle above the resistance level at 1.3385 – 1.3400. In case GBP/USD manages to settle above the 1.3400 level, it will head towards the next resistance at 1.3485 – 1.3500. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

USD/CAD Moves Lower As Traders Ignore The Sell-Off In Precious Metals Markets

USD/CAD remains under pressure despite the strong sell-off in precious metals markets. Gold is down by -3%, while silver pulled back by -5.6%. Other commodity-related currencies have also managed to gain some ground in today’s trading session.

If USD/CAD settles below the 1.3950 level, it will head towards the support level at 1.3900 – 1.3915. On the upside, a move above the resistance at 1.3985 – 1.4000 will push USD/CAD towards the 50 MA at 1.4018.

USD/JPY Pulls Back After BoJ Interest Rate Decision

USD/JPY is losing some ground as traders react to BoJ Interest Rate Decision. The Bank of Japan left the interest rate unchanged at 1.25%, in line with analyst estimates.

Traders also had a chance to take a look at economic reports from Japan. Unemployment Rate declined from 2.5% in August to 2.4% in September, compared to analyst forecast of 2.5%.

Retail Sales increased by +2.3% year-over-year in September, compared to analyst consensus of +3.3%. Industrial Production grew by +2.2%, while analysts expected that it would increase by +1.3%. The report did not have a material impact on market dynamics as traders have mostly focused on BoJ decision.

Both Fed and BoJ decided to take a pause, and USD/JPY traders remained in wait-and-see mode. The Japanese yen remains fundamentally weak, but bulls are worried that BoJ may intervene in case USD/JPY climbs towards the 160.00 level.

In case USD/JPY stays below the 50 MA at 157.57, it will head towards the 157.00 level. A move below 157.00 will push USD/JPY towards recent lows near 156.00.

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