U.S. Dollar Rebounds From Session Lows As Composite PMI Beats Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Away From Session Lows

U.S. Dollar Index continues its attempts to rebound as traders react to PMI reports. Manufacturing PMI declined from 53.9 in July to 53.2 in August, compared to analyst forecast of 53.9. Services PMI improved from 54.6 to 56.8, compared to analyst consensus of 54. Numbers above 50 show expansion. The reports indicated that U.S. economy remained in good shape.

In case U.S. Dollar Index stays above the support at 98.60 – 98.75, it will head towards the nearest resistance level, which is located in the 99.25 – 99.40 range. On the support side, a move below the 98.60 level will push U.S. Dollar Index towards the support at 97.85 – 98.00.

EUR/USD Remains Stuck Near 1.1700

EUR/USD was mostly flat as traders focused on Euro Area PMI data. Manufacturing PMI improved from 51.9 in July to 52.8 in August, compared to analyst consensus of 51.8. Services PMI remained unchanged at 51.7, while analysts expected that it would decline to 51.5. The reports indicated that the European economy expanded despite high oil prices.

Currently, EUR/USD is trying to settle above the resistance level at 1.1685 – 1.1700. In case EUR/USD manages to settle above the 1.1700 level, it will head towards the next resistance level, which is located in the 1.1775 – 1.1790 range. RSI has recently moved into oversold territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

GBP/USD Gained Some Ground As Traders Focused On PMI Data

GBP/USD moved higher as UK Services PMI exceeded analyst expectations. The report showed that UK Services PMI improved from 52.1 in July to 52.8 in August, compared to analyst forecast of 51.8.

From the technical point of view, GBP/USD continues its attempts to settle above the resistance level at 1.3635 – 1.3650. If GBP/USD climbs above the 1.3650 level, it will head towards the resistance at 1.3720 – 1.3735.

USD/CAD Tested New Lows

USD/CAD remains under pressure as traders focus on the strong rally in precious metals markets. Gold climbed above the $4600 level, while silver moved above $69.00. Other commodity-related currencies are also moving higher in today’s trading session.

A successful test of the support level at 1.3735 – 1.3750 will open the way to the test of the next support at 1.3635 – 1.3650. On the upside, a move above the 1.3775 level will open the way to the test of the 1.3800 level. In case USD/CAD climbs above 1.3800, it will head towards the resistance at 1.3825 – 1.3840.

USD/JPY Moved Lower As Japan’s Inflation Rate Exceeded Estimates

USD/JPY pulled back despite rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.23% level, while the yield of 10-year Treasuries settled above 4.73%. Treasury yields are rising despite Bessent’s attempts to push them lower via verbal interventions.

Traders also focus on inflation data from Japan. Inflation Rate increased from 1.6% in June to 1.9% in July, compared to analyst forecast of 1.7%. Core Inflation Rate grew from 1.6% to 1.8%, in line with analyst estimates.

The nearest support level for USD/JPY is located in the 157.50 – 158.00 range. If USD/JPY declines below 157.50, it will head towards the next support at 155.00 – 155.50. On the upside, a move above the 50 MA at 159.15 will open the way to the test of the resistance level at 159.50 – 160.00.

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