U.S. Dollar Gains Ground As ISM Services PMI Beats Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher As Traders React To Economic Reports

U.S. Dollar Index gained some ground as traders reacted to the ADP Employment Change report for December. The report indicated that private businesses added 41,000 jobs, compared to analyst forecast of 47,000. While the jobs report missed analyst estimates, the better-than-expected ISM Services PMI report provided support to the American currency.

The technical picture remains unchanged as U.S. Dollar Index needs to settle above the resistance at 98.85 – 99.00 to gain additional upside momentum in the near term.

EUR/USD Is Little Changed As Euro Area Core Inflation Rate Drops To 2.3%

EUR/USD is mostly flat as traders focus on inflation data from the EU. Inflation Rate declined from 2.1% in November to 2% in December, in line with analyst estimates. Core Inflation Rate decreased from 2.4% to 2.3%, while analysts expected that it would remain unchnaged at 2.4%.

In case EUR/USD climbs back above the 1.1700 level, it will get to the test of the resistance at 1.1715 – 1.1730.

GBP/USD Tests Support At 1.3475 – 1.3490

GBP/USD pulls back as traders focus on the weaker-than-expected UK Construction PMI report. The report showed that Construction PMI improved from 39.4 in November to 40.1 in December, compared to analyst consensus of 42.5.

Currently, GBP/USD is trying to settle below the support at 1.3475 – 1.3490. In case this attempt is successful, GBP/USD will move towards the next support level, which is located in the 1.3360 – 1.3375 range.

USD/CAD Tests Resistance At 1.3815 – 1.3830

USD/CAD continues to move higher as demand for commodity-related currencies declines.

If USD/CAD settles above the resistance at 1.3815 – 1.3830, it will move towards the next resistance level at 1.3890 – 1.3905.

USD/JPY Stays Range-Bound

USD/JPY gains some ground despite the pullback in Treasury yields. From the technical point of view, USD/JPY is stuck in a tight 156.15 – 156.80 range.

A move above the 156.80 level will push USD/JPY towards the resistance level at 158.00 – 158.50.

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