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U.S. Dollar Pulls Back As Inflation Rate Falls To 2.3%: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY
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Key Points:
- EUR/USD moved above the 1.1150 level as traders reacted to U.S. inflation data.
- USD/CAD moved lower as demand for commodity-related currencies increased.
- USD/JPY faced strong resistance in the 147.00 - 148.00 range.
U.S. Dollar Retreats As Inflation Rate Misses Estimates
U.S. Dollar Index pulled back as traders focused on U.S. inflation data. Inflation Rate declined from 2.4% in March to 2.3% in April, compared to analyst forecast of 2.4%. Core Inflation Rate remained unchanged at 2.8%, in line with analyst expectations. The lower-than-expected Inflation Rate triggered a strong pullback in U.S. Dollar Index.
In case U.S. Dollar Index settles below the 101.00 level, it will move towards the nearest support level, which is located in the 100.20 – 100.40 range.
EUR/USD Rebounds After Sell-Off
EUR/USD gained ground as traders reacted to the better-than-expected Euro Area ZEW Economic Sentiment Index report. The report showed that Economic Sentiment improved from -18.5 in April to +11.6 in May, compared to analyst forecast of -3.5.
A move above the 1.1200 level will open the way to the test of the nearest resistance at 1.1275 – 1.1290.
GBP/USD Gains Ground, Supported By U.S. Inflation Data
GBP/USD gained ground as traders focused on the UK Unemloyment Rate report, whcih showed that Unemployment Rate increased from 4.4% in February to 4.5% in March. The report met analyst estimates.
The nearest resistance level for GBP/USD is located in the 1.3300 – 1.3320 range. If GBP/USD climbs above the 1.3320 level, it will move towards the next resistance at 1.3420 – 1.3440.
USD/CAD Is Heading Towards The Support At 1.3930 – 1.3950
USD/CAD pulled back amid strong rally in the oil markets. Other commodity-related currencies gained significant upside momentum in today’s trading session.
A successful test of the support level at 1.3930 – 1.3950 will push USD/CAD towards the 50 MA at 1.3867.
USD/JPY Is Losing Ground As Traders Ignore Rising Treasury Yields
USD/JPY did not manage to settle above the resistance at 147.50 – 148.00 despite rising Treasury yields.
If USD/JPY declines below the 147.00 level, it will move towards the 50 MA at 145.06.
For a look at all of today’s economic events, check out our economic calendar.
About the Author
Vladimir Zernovauthor
In more than 15 years of trading in the financial markets, Vladimir dealt with a wide range of brokers and financial instruments. His career as a day-trader at a proprietary trading firm goes back to 2007. Later, Vladimir turned to longer time frames and became an independent trader and analyst managing his own portfolio. Using his experience, he helps traders find the best broker in his reviews.
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