U.S. Dollar Gains Ground As Traders React To ISM Manufacturing PMI: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher As Traders Prepare For Non Farm Payrolls Report

U.S. Dollar Index gains ground as traders focus on ISM Manufacturing PMI report and react to ADP Employment Change report.

ISM Manufacturing PMI declined from 54.0 in May to 53.3 in June, compared to analyst forecast of 54. Numbers above 50 show expansion. ISM Manufacturing Employment increased from 48.6 in May to 49.7 in June, compared to analyst consensus of 49.

ADP Employment Change report showed that private businesses added 98,000 jobs in June, compared to analyst forecast of 113,000. Tomorrow, traders will focus on the Non Farm Payrolls report, which is expected to show that U.S. economy added 110,000 jobs in June. The Non Farm Payrolls data will likely have a material impact on forex market dynamics.

In case U.S. Dollar Index settles above 101.15 – 101.30, it will head towards the nearest resistance level, which is located in the 101.85 – 102.00 range. On the support side, a move below the 101.15 level will push U.S. Dollar Index towards the next support at 100.50 – 100.65.

EUR/USD Retreats As Euro Area Inflation Rate Drops To 2.8%

EUR/USD pulled back as traders focused on inflation data from the EU. Euro Area Inflation Rate declined from 3.2% in May to 2.8% in June, compared to analyst forecast of 3%. Core Inflation Rate increased from 2.6% to 2.4%, compared to analyst forecast of 2.6%.

The nearest support level for EUR/USD is located in the 1.1350 – 1.1365 range. A successful test of this level will open the way to the test of the next support at 1.1285 – 1.1300.

GBP/USD Tests Resistance At 1.3250 – 1.3265

GBP/USD gains ground as traders react to the UK Nationwide Housing Prices report. The report showed that housing prices increased by +2.2% year-over-year in June, compared to analyst forecast of +2.4%.

Currently, GBP/USD is trying to settle above the resistance at 1.3250 – 1.3265. In case GBP/USD manages to settle above the 1.3265 level, it will head towards the resistance at 1.3335 – 1.3350. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Moves Higher As Traders Stay Bullish

USD/CAD continues its attempts to settle above the resistance at 1.4225 – 1.4240 despite the strong rebound in precious metals marekts. Other commodity-related currencies are mixed in today’s trading session.

A move above the 1.4240 level will open the way to the test of the resistance level at 1.4300 – 1.4315. On the support side, USD/CAD needs to settle below the 1.4170 level to gain downside momentum in the near term. In this case, USD/CAD will head towards the support at 1.4125 – 1.4140.

USD/JPY Pulls Back Amid Profit-Taking

USD/JPY is losing some ground as traders stay cautious amid intervention risks and react to Consumer Confidence report from Japan. The report indicated that Consumer Confidence increased from 33.6 in May to 33.8 in June, compared to analyst forecast of 34.

At this point, there are no signs of interventions from the Bank of Japan. However, bulls stay cautious as the yen is trading at four-decade lows. In case USD/JPY settles above the 163.00 level, it will head towards the 165.00 level. RSI has moved back into the moderate territory, so there is enough room to gain momentum in the near term.

If you’d like to know more about how to trade forex, please visit our educational area.