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.
EUR/USD Price Forecast
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See all EUR/USD forecastsGBP/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.
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