U.S. Dollar Retreats As Bessent Says Fed Should Cut Rates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Tests New Lows

U.S. Dollar Index remains under pressure as traders bet on dovish Fed. U.S. Treasury Secretary Scott Bessent urged Fed to cut the federal funds rate by 50 basis points in September, putting additional pressure on the American currency.

In case U.S. Dollar Index stays below the 97.80 level, it will head towards the nearest support, which is located in the 97.10 – 97.30 range.

EUR/USD Climbed Above 1.1700

EUR/USD tests new highs as traders focus on dovish Fed policy outlook. In the EU, traders had a chance to take a look at Germany’s Wholesale Prices report. The report showed that Wholesale Prices decreased by -0.1% month-over-month in July, compared to analyst forecast of +0.2%.

If EUR/USD manages to settle above the resistance at 1.1685 – 1.1700, it will move towards the next resistance at 1.1800 – 1.1815.

GBP/USD Tests Resistance At 1.3570 – 1.3585

GBP/USD attempts to settle above the resistance at 1.3570 – 1.3585 as strong rally continues. Traders should note that RSI is in the overbought territory, so the risks of a pullback are rising.

A move above the 1.3585 level will open the way to the test of the resistance, which is located in the 1.3665 – 1.3680 range.

USD/CAD Is Flat Despite Rising Demand For Commodity-Related Currencies

USD/CAD is mostly flat as traders wait for additional catalysts. Other commodity-related currencies are moving higher in today’s trading session.

The nearest support level for USD/CAD is located in the 1.3735 – 1.3750 range. A successful test of this level will push USD/CAD towards the next support at 1.3585 – 1.3600.

USD/JPY Moves Lower As Treasury Yields Fall

USD/JPY is losing ground as traders focus on the strong pullback in Treasury yields.

In case USD/JPY settles below the 147.00 level, it will head towards the support at 143.00 – 143.50.

For a look at all of today’s economic events, check out our economic calendar.