U.S. Dollar Pulls Back From Session Highs As Traders Focus On CPI Data: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Attempts To Gain Ground After CPI Report

U.S. Dollar Index is swinging between gains and losses as traders focus on the CPI report. The report indicated that Inflation Rate remained unchanged at 3.4% in August, in line with analyst estimates. Core Inflation Rate decreased from 2.5% in July to 2.4% in August. The report has also met analyst expectations. I’d note that Core Inflation Rate grew by +0.3% a month-over-month basis, exceeding the analyst forecast of +0.2%.

Traders also focus on the strong pullback in the oil markets. Oil prices are down by -3.5%, which is bearish for U.S. dollar.

In case U.S. Dollar Index settles back above the 50 MA at 99.08, it will head towards the nearest resistance at 99.25 – 99.40. A move above the 99.40 level will open the way to the test of the next resistance at 99.85 – 100.00.

EUR/USD Remains Stuck Near 1.1600

EUR/USD managed to rebound from session lows as traders reacted to U.S. inflation data and evaluated chances for a rate hike at the next Fed meeting. According to FedWatch Tool, the probability of a rate hike has increased to 86.7%.

If EUR/USD settles back above the support level at 1.1600 – 1.1615, it will head towards the resistance at 1.1685 – 1.1700. On the support side, a move below 1.1570 will open the way to the test of the support at 1.1500 – 1.1515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

GBP/USD Moves Higher As UK GDP Exceeds Estimates

GBP/USD gains ground as traders focus on GDP report from the UK. The report indicated that GDP increased by +0.4% month-over-month in July, compared to analyst forecast of 0%.

Traders also had a chance to take a look at Industrial Production and Manufacturing Production report. UK Industrial Production increased by +0.2% month-over-month in July, while Manufacturing Production grew by +0.9%. Both reports exceeded analyst estimates.

Currently, GBP/USD is trying to settle above the 50 MA at 1.3524. In case this attempt is successful, GBP/USD will head towards the resistance at 1.3550 – 1.3565. A move above the 1.3565 level will push GBP/USD towards the next resistance at 1.3635 – 1.3650.

USD/CAD Tests New Highs As Rebound Continues

USD/CAD gained ground despite the rebound in precious metals markets. Other commodity-related currencies managed to gain ground in today’s trading session.

USD/CAD climbed above the 1.3850 level and made an attempt to settle above 1.3880. In case USD/CAD climbs above 1.3880, it will move towards the resistance level at 1.3900 – 1.3915. On the support side, a successful test of the support at 1.3825 – 1.3840 will open the way to the test of the next support at 1.3750 – 1.3765.

USD/JPY Retreats As Traders Stay Bearish

USD/JPY pulled back as traders bet on hawkish BoJ and ignored the risks of a rate hike in the U.S. Treasury yields were mixed in today’s trading session. The yield of 10-year Treasuries climbed above the 4.61% level, while the yield of 10-year Treasuries pulled back towards 4.95%.

The nearest support level for USD/JPY is located in the 152.50 – 153.00 range. If USD/JPY declines below the 152.50 level, it will head towards the next support at 149.50 – 150.00.

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