U.S. Dollar Gains Ground As Retail Sales Exceed Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher As Traders Focus On Strong Retail Sales Data

U.S. Dollar Index gains ground as traders react to the Retail Sales report and wait for Fed decision.

The Retail Sales report indicated that Retail Sales increased by +0.9% month-over-month in May, compared to analyst forecast of +0.5%. Retail Sales Ex Autos grew by +0.8%, while analysts expected that they would increase by +0.5%.

Today, traders also had a chance to take a look at the Pending Home Sales report for May. The report indicated that Pending Home Sales grew by +3.8% month-over-month in May, compared to analyst forecast of +0.8%.

Better-than-expected reports provided support to the American currency. However, traders stay cautious as they wait for Fed decision and first comments from new Fed Chair Warsh.

A successful test of the resistance at 99.70 – 99.85 will open the way to the test of the next resistance level, which is located in the 100.50 – 100.65 range.

EUR/USD Pulls Back Ahead Of Fed Decision

EUR/USD is losing ground as traders focus on the upcoming Fed decision. The Fed is expected to leave interest rates unchanged. Market dynamics will depend on FOMC Economic Projections and comments from Fed Chair Warsh.

In case EUR/USD pulls back below the 50 MA at 1.1566, it will head towards the nearest support level, which is located in the 1.1500 – 1.1515 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

GBP/USD Retreats As UK Inflation Rate Remains Unchanged

GBP/USD pulls back as traders focus on inflation data from the UK. Inflation Rate remained unchanged at 2.8% in May, while analysts expected that it would increase to 3%. Core Inflation Rate grew from 2.5% in April to 2.6% in May, compared to analyst consensus of 2.7%.

A move below the 50 MA at 1.3390 will open the way to the test of the support level at 1.3335 – 1.3350. On the upside, GBP/USD needs to settle above the resistance at 1.3450 – 1.3465 to gain upside momentum in the near term. In this case, GBP/USD will head towards the resistance at 1.3535 – 1.3550.

USD/CAD Tests New Highs

USD/CAD gains ground as traders stay bullish ahead of the Fed Interest Rate Decision. Other commodity-related currencies are mixed in today’s trading session.

Currently, USD/CAD is trying to settle above the resistance level at 1.4035 – 1.4050. In case USD/CAD manages to settle above this level, it will head towards the next resistance, which is located in the 1.4125 – 1.4140 range.

USD/JPY Stays Range-Bound

USD/JPY remains stuck in a tight range as traders react to Japan’s Exports report. The report indicated that Exports increased by +17% year-over-year in May, compared to analyst consensus of +16.2%.

In case USD/JPY settles below the 160.00 level, it will head towards the nearest support, which is located in the 158.00 – 158.50 range. On the upside, a move above 160.50 will push USD/JPY towards the resistance level at 161.50 – 162.00.

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