U.S. Dollar Retreats As Producer Prices Drop: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Pulls Back As PPI Misses Estimates

U.S. Dollar Index is moving lower as traders react to Producer Prices report. The report indicated that Producer Prices decreased by -0.3% month-over-month in June, compared to analyst forecast of 0%. Core PPI increased by +0.2%, while analysts forecasted that it would grow by +0.4%.

Today, traders also had a chance to take a look at the NY Empire State Manufacturing Index report. The report showed that NY Empire State Manufacturing Index improved from 5.70 in June to 15.60 in July, compared to analyst consensus of 8.8.

Currently, U.S. Dollar Index is trying to settle below the support level at 100.50 – 100.65. In case this attempt is successful, U.S. Dollar Index will move towards the next support, which is located in the 99.75 – 99.90 range.

EUR/USD Remains Stuck Near The 1.1435 Level

EUR/USD is moving higher despite the weaker-than-expected Industrial Production report. The report indicated that Industrial Production decreased by -0.2% month-over-month in May, compared to analyst forecast of +0.2%.

The technical picture remains unchanged as EUR/USD is stuck near the resistance level at 1.1420 – 1.1435. If EUR/USD manages to settle above the 1.1435 level, it will head towards the resistance at 1.1500 – 1.1515.

GBP/USD Tests New Highs

GBP/USD rallied as traders reacted to the softer-than-expected U.S. PPI data and remained focused on U.S. CPI report, which was released yesterday.

GBP/USD climbed above the resistance level at 1.3450 – 1.3465 and is trying to settle above the 1.3500 level. In case this attempt is successful, GBP/USD will move towards the next resistance, which is located in the 1.3535 – 1.3550 range. It should be noted that RSI has moved into overbought territory, so the risks of a pullback are increasing.

USD/CAD Is Losing Ground Amid Rising Demand For Commodity-Related Currencies

USD/CAD is moving lower despite the pullback in precious metals markets. Gold declined below the $4050 level, while silver settled below $57.00. Other commodity-related currencies are also moving higher in today’s trading session.

The nearest support level for USD/CAD is located in the 1.4010 – 1.4025 range. A successful test of this level will open the way to the test of the next support at 1.3915 – 1.3930. RSI is in the oversold territory, but there is some room to gain additional downside momentum in the near term.

On the upside, a move above the 1.4080 level will push USD/CAD towards the resistance level at 1.4125 – 1.4140.

USD/JPY Is Flat As Traders Ignore Falling Treasury Yields

USD/JPY is mostly flat despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.15% level, while the yield of 10-year Treasuries settled near 4.55%.

Traders stay bullish due to the ultra-dovish policy of the Bank of Japan. The market believes that BoJ cannot raise rates without putting too much pressure on the Japanese economy.

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