U.S. Dollar Pulls Back As Inflation Rate Jumps to 3.3%: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Remains Under Pressure Ahead Of The Weekend

U.S. Dollar Index is losing some ground as traders react to CPI report. The report indicated that Inflation Rate increased from 2.4% in February to 3.3% in March, in line with analyst estimates. Core Inflation Rate grew from 2.5% to 2.6%, while analysts expected that it would increase to 2.7%.

Today, traders also had a chance to take a look at the Michigan Consumer Sentiment report for April. The report showed that Michigan Consumer Sentiment declined from 53.3 in March to 47.6 in April, compared to analyst forecast of 52. Year-ahead inflation expectations increased from 3.8% in March to 4.8% in April.

Factory Orders were unchanged on a month-over-month basis in February, compared to analyst forecast of -0.2%.

The weaker-than-expected Consumer Confidence data may serve as an additional bearish catalyst for the American currency. Most likely, traders will ignore the Factory Orders report.

U.S. Dollar Index has recently made several attempts to settle below the 98.50 level, but these attempts yielded no results. If U.S. Dollar Index declines below 98.50, it will head towards the support level, which is located in the 98.00 – 98.15 range.

EUR/USD Tests New Highs

EUR/USD is moving higher as traders react to U.S. economic reports and bet on de-escalation in the Middle East.  Oil prices gain some ground as traders wait for negotiations between U.S. and Iran, but this move does not put any pressure on the European currency.

EUR/USD settled above the previous resistance level at 1.1665 – 1.1680 and is trying to settle above the 1.1725 level. In case this attempt is successful, EUR/USD will move towards the resistance at 1.1765 – 1.1780.

GBP/USD Tests Resistance At 1.3470 – 1.3485

GBP/USD gains ground as traders focus on general weakness of the American currency.

From the technical point of view, GBP/USD is trying to settle above the resistance at 1.3470 – 1.3485. If GBP/USD manages to settle above the 1.3485 level, it will head towards the next resistance at 1.3570 – 1.3585.

USD/CAD Attempts To Rebound Amid Falling Demand For Commodity-Related Currencies

USD/CAD gained some ground as traders reacted to the Unemployment Rate report from Canada. The report indicated that Unemployment Rate remained unchanged at 6.7% in March, compared to analyst forecast of 6.8%.

Other commodity-related currencies have also moved lower in today’s trading session.

The nearest support level for USD/CAD is located in the 1.3800 – 1.3815 range. If USD/CAD declines below the 1.3800 level, it will move towards the next support at 1.3700 – 1.3715.

USD/JPY Moves Higher As Treasury Yields Rise

USD/JPY gained some ground as traders focused on rising Treasury yields. The yield of 2-year Treasuries climbed above the 3.80% level, while the yield of 10-year Treasuries settled above 4.30%.

If USD/JPY stays above the 50 MA at 159.17, it will move towards the psychologically important 160.00 level. A successful test of this level will open the way to the test of the resistance at 161.50 – 162.00.

It remains to be seen whether BoJ will be ready to defend the yen if USD/JPY climbs above the 160.00 level. High energy prices put significant pressure on the Japanese economy, while weaker yen will make Japan’s products more competitive in global markets.

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