U.S. Dollar Pulls Back As Inflation Rate Falls To 2.3%: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Retreats As Inflation Rate Misses Estimates

U.S. Dollar Index pulled back as traders focused on U.S. inflation data. Inflation Rate declined from 2.4% in March to 2.3% in April, compared to analyst forecast of 2.4%. Core Inflation Rate remained unchanged at 2.8%, in line with analyst expectations. The lower-than-expected Inflation Rate triggered a strong pullback in U.S. Dollar Index.

In case U.S. Dollar Index settles below the 101.00 level, it will move towards the nearest support level, which is located in the 100.20 – 100.40 range.

EUR/USD Rebounds After Sell-Off

EUR/USD gained ground as traders reacted to the better-than-expected Euro Area ZEW Economic Sentiment Index report. The report showed that Economic Sentiment improved from -18.5 in April to +11.6 in May, compared to analyst forecast of -3.5.

A move above the 1.1200 level will open the way to the test of the nearest resistance at 1.1275 – 1.1290.

GBP/USD Gains Ground, Supported By U.S. Inflation Data

GBP/USD gained ground as traders focused on the UK Unemloyment Rate report, whcih showed that Unemployment Rate increased from 4.4% in February to 4.5% in March. The report met analyst estimates.

The nearest resistance level for GBP/USD is located in the 1.3300 – 1.3320 range. If GBP/USD climbs above the 1.3320 level, it will move towards the next resistance at 1.3420 – 1.3440.

USD/CAD Is Heading Towards The Support At 1.3930 – 1.3950

USD/CAD pulled back amid strong rally in the oil markets. Other commodity-related currencies gained significant upside momentum in today’s trading session.

A successful test of the support level at 1.3930 – 1.3950 will push USD/CAD towards the 50 MA at 1.3867.

USD/JPY Is Losing Ground As Traders Ignore Rising Treasury Yields

USD/JPY did not manage to settle above the resistance at 147.50 – 148.00 despite rising Treasury yields.

If USD/JPY declines below the 147.00 level, it will move towards the 50 MA at 145.06.

For a look at all of today’s economic events, check out our economic calendar.