U.S. Dollar Retreats As GDP Growth Rate Misses Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Pulls Back As Traders React To GDP Growth Rate Report

U.S. Dollar Index is under strong pressure as traders focus on yesterday’s Fed decision and react to the weaker-than-expected GDP Growth Rate report.

The report indicated that GDP Growth Rate was +1.5% in the second quarter, compared to analyst forecast of +2.1%.

Personal Spending increased by +0.3% month-over-month in June, in line with analyst estimates. Personal Income grew by +0.2%, compared to analyst consensus of +0.3%.

PCE Price index declined from 4.1% in May to 3.7% in June, meeting analyst expectations.

Traders also had a chance to take a look at the Initial Jobless Claims report. The report showed that 197,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 200,000.

Currently, U.S. Dollar Index is trying to settle below the support at 99.85 – 100.00. In case this attempt is successful, U.S. Dollar Index will head towards the next support level at 99.25 – 99.40. It should be noted that RSI is in the oversold territory, so the risks of a rebound are increasing.

EUR/USD Tests New Highs As Euro Area GDP Growth Rate Beats Estimates

EUR/USD gained strong upside momentum as traders focused on inflation data from Germany. Inflation Rate increased from 2.3% in June to 2.8% in July, compared to analyst forecast of 2.7%. Euro Area GDP Growth Rate was +0.4% in the second quarter, compared to analyst consensus of +0.2%.

EUR/USD attempts to settle above the resistance at 1.1510 – 1.1525. If EUR/USD manages to settle above the 1.1525 level, it will move towards the next resistance level at 1.1600 – 1.1615. RSI is in the overbought territory, so the risks of a pullback are increasing.

GBP/USD Soars As Traders Focus On BoE Decision

GBP/USD rallied as traders reacted to the BoE Interest Rate Decision. The Bank of England left the interest rate unchanged at 3.75%, in line with analyst estimates. Six members voted to keep the rate unchanged, while three members voted for a hike. Analysts expected that two members would vote for a hike, so BoE meeting was more hawkish than expected.

A successful test of the resistance level at 1.3465 – 1.3480 will push GBP/USD towards the next resistance at 1.3550 – 1.3565.

USD/CAD Tests Support At 1.4010 – 1.4025

USD/CAD is losing ground as traders focus on the rally in precious metals markets. Gold climbed above the $4100 level, while silver settled above $58.50. Other commodity-related currencies are also moving higher in today’s trading session.

If USD/CAD settles below the support level at 1.4010 – 1.4025, it will move towards the next support at 1.3920 – 1.3935. RSI has recently moved into oversold territory, but there is enough room to gain additional momentum in the near term.

USD/JPY Dives After BoJ Intervention

USD/JPY suffered a sell-off as Bank of Japan intervened to support the yen. The Bank of Japan waited for a moment when U.S. dollar was under material pressure against a broad basket of currencies to amplify the effect of intervention.

If USD/JPY settles below the support at 159.50 – 160.00, it will head towards the next support level at 157.50 – 158.00. On the upside, a move above the 160.00 level will push USD/JPY towards the nearest resistance, which is located in the 161.50 – 162.00 range.

If you’d like to know more about how to trade forex, please visit our educational area.