U.S. Dollar Moves Higher As Traders Focus On Riots In France
U.S. Dollar Index gains ground as traders focus on the situation in Europe. In France, protests drew more than half a million people on Saturday. The situation deteriorated quickly, and protests turned into rioting and looting. Italy and several other European countries have also suffered from violent protests over the weekend.
In the U.S., traders focused on NAHB Housing Market Index report. The report indicated that NAHB Housing Market index decreased from 32 in September to 29 in October, compared to analyst forecast of 32.
In case U.S. Dollar Index settles above the 102.00 level, it will head towards the 50 MA at 102.16. A move above the 50 MA will open the way to the test of the resistance at 102.35 – 102.50.
EUR/USD Retreats Amid Sell-Off In European Bond Markets
EUR/USD pulled back as traders focused on weekend protests. While media attention was mostly concentrated on looters and rioters, peaceful protesters focused on cost-of-living issues. This is a challenging situation for European politicians who must cut expenses due to rising debt piles in EU countries.
The bond market bets that politicians will once again prefer to kick the can down the road, hoping for a miracle to bail them out. The yield of 10-year French government bonds climbed towards the 4.95% level as traders rushed to sell bonds after violent protests. Unrest in Europe is clearly bearish for the euro as politicians may be forced to boost spending at a time when EU countries need to cut expenses.
The nearest support level for EUR/USD is located in the 1.1175 – 1.1190 range. A successful test of this level will open the way to the test of the next support at 1.1075 – 1.1090.
GBP/USD Tests Support At 1.3285 – 1.3300
GBP/USD is losing ground as traders focus on the situation in Europe. There were no major protests in the UK, but the country suffers from same problems.
EUR/USD Price Forecast
Every new EUR/USD analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all EUR/USD forecastsIf GBP/USD manages to settle below the support level at 1.3285 – 1.3300, it will head towards the 50 MA at 1.3248. A move below the 50 MA will open the way to the test of the support at 1.3150 – 1.3165.
USD/CAD Pulls Back As Canada’s Inflation Rate Rises To 3.1%
USD/CAD pulled back as traders focused on inflation data from Canada. Inflation Rate increased from 3% in August to 3.1% in September, compared to analyst forecast of 3.2%. Core Inflation Rate declined from 2.4% to 2.2%, while analysts expected that it would remain unchanged at 2.4%.
Currently, USD/CAD is trying to settle below the support level at 1.4070 – 1.4085. In case this attempt is successful, USD/CAD will move towards the next support at 1.3985 – 1.4000.
USD/JPY Tests The 158.50 Level
USD/JPY is trying to settle above the resistance level at 158.00 – 158.50 as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.78% level, while the yield of 10-year Treasuries settled near 5.15%.
If USD/JPY settles above the 158.50 level, it will head towards the next resistance, which is located in the 160.00 – 160.50 range. It remains to be seen whether Bank of Japan is ready to provide support to the yen ahead of Fed Interest Rate Decision, which will be announced on October 28.
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