U.S. Dollar Moves Lower As CPI Meets Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Is Losing Ground After CPI Report

U.S. Dollar Index pulls back as traders react to CPI report. The report indicated that Inflation Rate increased from 3.8% in April to 4.2% in May, in line with analyst estimates. Core Inflation Rate increased from 2.8% to 2.9%. The report has also met analyst expectations.

Treasury yields gained some ground as traders reacted to inflation data. However, the move was not strong as CPI did not exceed estimates.

In case U.S. Dollar Index declines below the 99.70 level, it will head towards the 50 MA at 99.54. A move below the 50 MA will open the way to the test of the support level at 98.85 – 99.00.

On the upside, a move above the psychologically important 100.00 level will push U.S. Dollar Index towards the resistance level at 100.50 – 100.65.

EUR/USD Moves Higher As Traders Ignore Geopolitical Risks

EUR/USD gained some ground despite rising geopolitical tensions. President Trump said that U.S. will resume attacks against Iran as the country did not agree to a deal. Brent oil rallied towards the $94.00 level as oil traders reacted to Trump’s comments. Interestingly, rising oil prices did not put pressure on the European currency.

The nearest resistance level for EUR/USD is located in the 1.1585 – 1.1600 range. In case EUR/USD manages to settle above the 1.1600 level, it will head towards the next resistance at 1.1665 – 1.1680.

GBP/USD Tests The 50 MA At 1.3414

GBP/USD moved higher as traders reacted to inflation data from the U.S.  Traders have also ignored rising geopolitical tensions despite Trump’s hawkish comments.

Currently, GBP/USD is trying to settle above the 50 MA at 1.3414. In case this attempt is successful, GBP/USD will move towards the next resistance level, which is located in the 1.3450 – 1.3465 range.

On the support side, the nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range. A move below the 1.3335 level will open the way to the test of the next support level at 1.3215 – 1.3230.

USD/CAD Retreats As Traders React To BoC Decision

USD/CAD is losing ground as traders focus on BoC Interest Rate Decision. The Bank of Canada left the interest rate unchanged, in line with analyst expectations. The Bank noted that economic activity in Canada remained weak amid uncertainty about U.S. trade policy.

USD/CAD failed to settle above the resistance at 1.3950 – 1.3965 and made an attempt to settle below the 1.3900 level. In case USD/CAD manages to settle below 1.3900, it will head towards the support, which is located in the 1.3860 – 1.3875 range.

USD/JPY Tests The 160.50 Level As Treasury Yields Rise

USD/JPY continues to move higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.13% level, while the yield of 10-year Treasuries settled near 4.55%.

It should be noted that traders remain cautious as the Bank of Japan may intervene to provide support to the yen. In case USD/JPY settles above the 160.50 level, it will move towards the resistance level, which is located in the 161.50 – 162.00 range. RSI is close to the overbought territory, but 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.