U.S. Dollar Pulls Back As Traders Ignore Strong GDP Data: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Pulls Back From Yearly Highs

U.S. Dollar Index pulls back despite the better-than-expected GDP Growth Rate report. The report indicated that GDP Growth Rate was +2.1% in the first quarter, compared to analyst forecast of +1.6%.

Personal Spending increased by +0.7% month-over-month in May, compared to analyst consensus of +0.6%. Personal Income grew by +0.7%, exceeding the analyst estimate of +0.4%.

The nearest support level for U.S. Dollar Index is located in the 101.15 – 101.30 range. In case U.S. Dollar Index declines below the 101.15 level, it will head towards the next support at 100.50 – 100.65.

EUR/USD Gains Ground As Traders Bet On A Rebound

EUR/USD rebounds as traders take some profits off the table after the strong pullback. Traders also focus on the GfK Consumer Confidence report from Germany. The report indicated that Consumer Confidence improved from -29.7 in June to -29.2 in July, compared to analyst consensus of -27.6.

Currently, EUR/USD is trying to settle back above the support at 1.1350 – 1.1365. In case this attempt is successful, EUR/USD will move towards the nearest resistance level, which is located in the 1.1420 – 1.1435 range.

GBP/USD Moves Higher Amid Falling Treasury Yields

GBP/USD moved higher despite the rebound in the oil markets. Oil prices gained 2% as U.S. Secretary of State Marco Rubio said that the U.S. would not tolerate tolls in the Strait of Hormuz.

GBP/USD climbed above the support at 1.3165 – 1.3180 and is trying to setlte above the 1.3200 level. In case this attempt it successful, GBP/USD will head towards the resistance level at 1.3250 – 1.3265. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Retreats As Precious Metals Markets Rebound

USD/CAD is losing ground as traders focus on the rebound in precious metals markets. Gold climbed towards the $4050 level, while silver settled above the $58.50 level. Other commodity-related currencies are also moving higher in today’s trading session.

From the technical point of view, USD/CAD failed to settle above the resistance at 1.4225 – 1.4240 and pulled back towards the 1.4180 level. In case USD/CAD settles below this level, it will head towards the support at 1.4125 – 1.4140.

On the upside, USD/CAD needs to settle above the 1.4240 level to have a chance to gain upside momentum in the near term. A move above 1.4240 will push USD/CAD towards the resistance level at 1.4300 – 1.4315.

USD/JPY Is Mostly Flat As Traders Wait For The Test Of The 162.00 Level

USD/JPY continues its attempts to settle above the resistance level at 161.50 – 162.00 despite the pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 4.10% level, while the yield of 10-year Treasuries settled below 4.38%.

FedWatch Tool indicates that Fed will raise rates at the meeting in September. Traders believe that rising yields in the U.S. will put additional pressure on the Japanese yen.

There are no signs of interventions from the BoJ, and it remains to be seen whether the central bank is ready to act in case USD/JPY climbs above the 162.00 level.

A move above 162.00 will open the way to the test of the 164.00 level. USD/JPY has not visited such levels since 1986.

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