U.S. Dollar Moves Higher At The Start Of The Week
U.S. Dollar Index gains ground as traders focus on rising oil prices and react to the Dallas Fed Manufacturing Index report. The report indicated that Dallas Fed Manufacturing index increased from 9.8 in September to 13.4 in October, compared to analyst forecast of 7.
Brent oil climbed above the $117.00 level as traders bet that U.S. and Israel would restart the military operation against Iran. Saudi Arabia, Pakistan, and Turkey are trying to arrange talks, but the market does not believe that their efforts would be successful.
In case U.S. Dollar Index settles above the 50 MA at 101.83, it will head towards the nearest resistance level at 102.35 – 102.50. On the support side, a successful test of the support at 101.50 – 101.65 will open the way to the test of the next support level at 100.85 – 101.00.
EUR/USD Tests Support At 1.1175 – 1.1190
EUR/USD is losing ground despite the better-than-expected Ifo Business Climate report from Germany. The report showed that Ifo Business Climate improved from 89.9 in September to 90.2 in October, compared to analyst consensus of 90.
Currently, EUR/USD is trying to settle below the support level at 1.1175 – 1.1190. In case this attempt is successful, EUR/USD will move towards the next support level at 1.1100 – 1.1115.
GBP/USD Tests The 50 MA At 1.3335
GBP/USD pulled back as demand for riskier assets declined amid rising oil prices. From the technical point of view, GBP/USD failed to settle above the resistance level at 1.3385 – 1.3400 and declined towards the 50 MA at 1.3335.
If GBP/USD manages to settle below the 50 MA, it will head towards the support level, which is located in the 1.3285 – 1.3300 range. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term.
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See all EUR/USD forecastsUSD/CAD Moves Higher As Demand For Commodity-Related Currencies Falls
USD/CAD gained ground as traders worried that high oil prices will hurt global economy and reduce demand for commodities, which will be bearish for the Canadian dollar. Other commodity-related currencies have also moved lower in today’s trading session.
If USD/CAD climbs above the 1.4050 level, it will get to the test of the nearest resistance at 1.4070 – 1.4085. A move above the 1.4085 level will open the way to the test of the next resistance at 1.4150 – 1.4165.
USD/JPY Gains Ground As Rebound Continues
USD/JPY continues to rebound after recent pullback. Treasury yields are mixed in today’s trading session. The yield of 2-year Treasuries climbed above the 4.70% level, while the yield of 10-year Treasuries puled back below 4.98%.
If USD/JPY climbs back above the 50 MA at 157.54, it will head towards the resistance level at 158.00 – 158.50. This resistance level has been tested many times and proved its strength. A successful test of this level will push USD/JPY towards the next resistance level at 160.00 – 160.50.
I’d note that Fed will announce its Interest Rate Decision on October 28, so it remains to be seen whether forex traders will be ready for big moves ahead of this key event.
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