U.S. Dollar Tests New Highs As Composite PMI Beats Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Tests New Highs As Rally Continues

U.S. Dollar Index gains ground as traders react to PMI reports. The reports indciated that Manufacturing PMI increased from 55.1 in May to 55.7 in June, compared to analyst forecast of 54.8.

Services PMI grew from 50.7 to 51.3, while analysts expected that it would increase to 51. Composite PMI improved from 51.5 to 52.2. Numbers above 50 show expansion.

The reports showed that U.S. economy continued to expand at a robust pace, so Fed would raise rates to fight inflation.

Currently, U.S. Dollar Index is trying to settle above the resistance at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 101.85 – 102.00 range.

EUR/USD Retreats As Traders Focus On The Weakness Of Germany’s Economy

EUR/USD pulled back as traders focused on disappointing PMI data from Germany. The country’s Composite PMI decreased from 48.8 in May to 48.0 in June, compared to anlayst forecast of 49.9. Numbers below 50 show contraction.

The nearest support level for EUR/USD is located in the 1.1350 – 1.1365 range. If EUR/USD declines below the 1.1365 level, it will head towards the next support at 1.1285 – 1.1300. It should be noted that RSI is in the oversold territory, so the risks of a rebound are increasing.

GBP/USD Pulls Back As PMI Reports Miss Estimates

GBP/USD is losing ground as traders focus on disappointing PMI data from the UK. Manufacturing PMI decreased from 53.9 in May to 53.1 in June, compared to analyst forecast of 53.8. Services PMI pulled back from 49.3 to 48.7, while analysts expected that it would increase to 50.5.

GBP/USD is moving towards the support level at 1.3165 – 1.3180. If GBP/USD declines below the 1.3165 level, it will head towards the next support at 1.3085 – 1.3100.

USD/CAD Gains Ground Amid Sell-Off In Precious Metals Markets

USD/CAD is moving higher as traders react to the strong pullback in precious metals markets. Gold is down by -1.2%, while silver pulled back by -4.6%. Other commodity-related currencies have found themselves under strong pressure in today’s trading session.

The nearest resistance level for USD/CAD is located in the 1.4225 – 1.4240 range. If USD/CAD climbs above the 1.4240 level, it will head towards the next resistance at 1.4300 – 1.4315. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.

USD/JPY Tests Resistance At 161.50 – 162.00

USD/JPY continues its attempts to settle above the resistance at 161.50 – 162.00 despite the encouraging PMI data. Manufacturing PMI improved from 54.5 in May to 54.9 in June, compared to analyst forecast of 54.5. Services PMI grew from 50.0 to 51.8, exceeding the analyst consensus of 50.3.

There are no signs of interventions from the Bank of Japan. The Japanese yen is trading at multi-decade lows, but it remains to be seen whether BoJ is ready to provide support to the national currency.

A successful test of the resistance at 161.50 – 162.00 will provide USD/JPY with a chance to gain strong upside momentum. In case BoJ does not intervene, USD/JPY may quickly get to the test of the 164.00 level.

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