U.S. Dollar Moves Higher As Oil Markets Rally: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher As WTI Oil Climbs Above $105

U.S. Dollar Index gains ground as traders focus on rising oil prices and prepare for tomorrow’s Fed Interest Rate Decision.

FedWatch Tool indicates that there is a 92.5% probability that Fed will raise the federal funds rate tomorrow. The market expects that the federal funds rate will be raised by at least 50 bps by December.

Today, traders also had a chance to take a look at the NY Empire State Manufacturing Index report. The report showed that NY Empire State Manufacturing Index decreased from 20.6 in August to 7.6 in September, compared to analyst forecast of 14.75. The report did not have a material impact on market dynamics as traders remained focused on the upcoming Fed decision.

Currently, U.S. Dollar Index is trying to settle above the 99.50 level. In case this attempt is successful, U.S. Dollar Index will head towards the resistance at 99.85 – 100.00. On the support side, a move below the support at 99.25 – 99.40 will open the way to the test of the 50 MA at 99.08.

EUR/USD Pulls Back As ZEW Economic Sentiment Index Misses Estimates

EUR/USD is losing ground as traders react to the disappointing Euro Area ZEW Economic Sentiment Index report. The report showed that ZEW Economic Sentiment Index decreased from 31.4 in August to 25.8 in September, compared to analyst consensus of 39.9.

The nearest support level for EUR/USD is located in the 1.1500 – 1.1515 range. In case EUR/USD manages to settle below the 1.1500 level, it will head towards the next support, which is located in the 1.1420 – 1.1435 range.

GBP/USD Tests Support At 1.3470 – 1.3485

GBP/USD is moving lower as traders focus on job market data from the UK. Unemployment Rate remained unchanged at 4.9% in July, while analysts expected that it would grow to 5%. I’d note that the forex market has mostly ignored the report and focused on the rally in the oil markets.

GBP/USD attempts to settle below the support level at 1.3470 – 1.3485. In case GBP/USD manages to settle below the 1.3470 level, it will head towards the next support, which is located in the 1.3400 – 1.3415 range.

USD/CAD Attempts To Settle Above 1.3930

USD/CAD gains some ground as traders prepare for Fed decision. Other commodity-related currencies are losing ground in today’s trading session.

In case USD/CAD manages to settle above the resistance level at 1.3900 – 1.3915, it will head towards the next resistance, which is located in the 1.3985 – 1.4000 range. RSI has recently moved back into moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/JPY Tests Resistance At 155.00 – 155.50

USD/JPY is moving higher as traders bet on hawkish Fed. The yield of 10-year Treasuries continues its attempts to settle above the psychologically important 5.00% level, providing some support to the American currency.

A successful test of the resistance at 155.00 – 155.50 will open the way to the test of the next resistance level at 158.00 – 158.50. On the support side, a move below the 50 MA at 154.49 will push USD/JPY towards the support level at 152.50 – 153.00.

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