U.S. Dollar Pulls Back As Traders Stay Focused On Warsh’s Comments
U.S. Dollar Index is losing ground as traders stay focused on yesterday’s Fed decision and react to GDP Growth Rate report.
The report indicated that GDP Growth Rate was 3.4% in the third quarter, compared to analyst forecast of 3.2%.
Traders also had a chance to take a look at the PCE Price Index report, which is Fed’s preferred inflation gauge. PCE Price Index increased from 3.4% in August to 3.6% in September, in line with analyst estimates.
EUR/USD Rebounds As ECB Leaves Rates Unchanged
EUR/USD gained ground as traders focused on ECB Interest Rate Decision. The European Central Bank left the interest rate unchanged at 2.65%, in line with analyst estimates.
ECB President Christine Lagarde would leave the ECB on February 7, nine months before her term was scheduled to end. Most likely, the EU is trying to hedge against a potential win of Marine Le Pen in French presidential elections in 2027. Her successor will be chosen later.
GBP/USD Climbed Above The 1.3350 Level
GBP/USD rallied as traders reacted to U.S. economic reports and focused on ECB decision.
From the technical point of view, GBP/USD climbed above the 50 MA at 1.3352 and moved towards the resistance level at 1.3385 – 1.3400. This resistance level has been tested many times and proved its strength. In case GBP/USD manages to settle above the 1.3400 level, it will head towards the next resistance, which is located in the 1.3485 – 1.3500 range.
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See all EUR/USD forecastsUSD/CAD Tests Support At 1.3985 – 1.4000
USD/CAD is losing ground despite the strong pullback in precious metals markets. Gold is down by -1.2%, while silver pulled back by -3%. Other commodity-related currencies are mixed in today’s trading session.
Currently, USD/CAD is trying to settle below the support level at 1.3985 – 1.4000. In case this attempt is successful, USD/CAD will head towards the next support at 1.3900 – 1.3915.
On the upside, USD/CAD needs to climb back above 1.4000 to have a chance to gain upside momentum in the near term. In this case, USD/CAD will head towards the 50 MA at 1.4032. A move above the 50 MA will open the way to the test of the resistance level at 1.4070 – 1.4085.
USD/JPY Stays Range-Bound As Traders Wait For BoJ Decision
USD/JPY remains stuck near key resistance at 158.00 – 158.50 as traders focus on the weaker-than-expected Consumer Confidence report from Japan. The report showed that Consumer Confidence declined from 35.4 in September to 35.0 in October, compared to analyst forecast of 35.1.
The Japanese yen did not show strong reaction to Fed decision. Traders are waiting for BoJ interest Rate Decision, which will be released tomorrow. Analysts expect that BoJ will leave the rate unchanged at 1.25%.
If USD/JPY manages to settle above the 158.50 level, it will head towards the resistance at 160.00 – 160.50. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term. I’d note that traders should be prepared for fast moves when BoJ releases its Interest Rate Decision.
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