U.S. Dollar Moves Lower As Bessent Boosts Bond Buybacks: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Remains Under Pressure As Bessent Raises Bond Buybacks To $6 Billion

U.S. Dollar Index is losing some ground as traders focus on Treasury’s decision to boost bond buybacks to $6 billion. Bessent continues his attempts to put pressure on yields, but they are rising amid rally in the oil markets. Worries about long-term sustainability of U.S. finances also push yields higher.

The yield of 10-year Treasuries climbed towards the 4.85% level, while the yield of 30-year Treasuries tested the psychologically important 5.30% level.

U.S. Dollar Index continues its attempts to settle below the support level at 98.60 – 98.75. In case U.S. Dollar Index manages to settle below the 98.60 level, it will head towards the next support at 97.70 – 97.85. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term.

EUR/USD Moves Higher Ahead Of Tomorrow’s ECB Decision

EUR/USD gained some ground as traders prepared for ECB Interest Rate Decision, which will be released tomorrow. Analysts expect that ECB will raise the interest rate from 2.4% to 2.65% due to rising oil prices.

The European Central Bank is forced to raise rates as the EU economy will face inflationary pressure due to high energy prices. It remains to be seen whether winter will be cold, but energy prices will likely stay high anyway.

If EUR/USD climbs above the 1.1650 level, it will head towards the resistance level at 1.1685 – 1.1700.

GBP/USD Remains Stuck Near Strong Resistance Level

GBP/USD remains stuck near the resistance level at 1.3550 – 1.3565. Traders are not ready to buy U.S. dollar amid rising Treasury yields. UK bond yields have  also settled near multi-year highs as traders worry about the situation in the UK economy.

If GBP/USD manages to settle above the resistance at 1.3550 – 1.3565, it will move towards the next resistance level, which is located in the 1.3635 – 1.3650 range. On the support side, a move below the 50 MA at 1.3528 will push GBP/USD towards the next support level, which is located in the 1.3470 – 1.3485 range.

USD/CAD Rebounds Above 1.3800

USD/CAD gains ground despite the strong rally in precious metals markets, which was triggered by Treasury’s decision to boost bond buybacks. Gold climbed above the $4400 level, while silver rallied above $67.50. Other commodity-related currencies were mixed in today’s trading session.

The nearest resistance level for USD/CAD is located in the 1.3825 – 1.3840 range. In case USD/CAD manages to settle above 1.3840, it will head towards the next resistance level at 1.3900 – 1.3915.

USD/JPY Tests The 153.00 Level

USD/JPY pulls back as traders focus on U.S. bond buybacks. Recent interventions, expectations of a rate hike from BoJ, and problems in U.S. debt market serve as positive catalysts for the Japanese yen.

The nearest support level for USD/JPY is located in the 152.50 – 153.00 range. A successful test of this level will push USD/JPY towards the support at 149.50 – 150.00. RSI has recently moved back into moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

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