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U.S. Dollar Retreats As PPI Misses Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY
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Key Points:
- EUR/USD climbed above the 1.1550 level as traders reacted to Producer Prices data from the U.S.
- GBP/USD moved towards the 1.3600 level despite the disappointing GDP report from the UK.
- USD/CAD tested new lows as demand for commodity-related currencies increased.
U.S. Dollar Is Under Strong Pressure After Producer Prices Report
U.S. Dollar Index is losing ground as traders react to Producer Prices data. PPI increased by +0.1% month-over-month in May, compared to analyst forecast of +0.2%. Core PPI grew by +0.1%, while analysts expected that it would increase by +0.3%.
Currently, U.S. Dollar Index is trying to settle below the support at 98.00 – 98.20. In case this attempt is successful, it will head towards the next support level, which is located in the 96.70 – 96.90 range.
EUR/USD Tests New Highs
EUR/USD tested new highs as traders reacted to economic reports from the U.S. Initial Jobless Claims report showed that 248,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 240,000.
If EUR/USD manages to settle above the resistance at 1.1550 – 1.1570, it will move towards the next resistance level at 1.1685 – 1.1700. RSI is in the overbought territory, so the risks of a pullback are increasing.
GBP/USD Tests Resistance At 1.3620 – 1.3640
GBP/USD moved higher despite the disappointing GDP report from the UK. GDP declined by -0.3% month-over-month in April, compared to analyst consensus of -0.1%.
A move above the resistance at 1.3620 – 1.3640 will push GBP/USD towards the next resistance level at 1.3735- 1.3750.
USD/CAD Attempts To Settle Below 1.3600
USD/CAD tested new lows amid rising demand for commodity-related currencies.
From the technical point of view, USD/CAD settled below the support at 1.3650 – 1.3665 and is moving towards the next support level at 1.3575 – 1.3590.
USD/JPY Moves Lower As Treasury Yields Pull Back
USD/JPY tests support at 143.50 – 144.00 as traders focused on the strong pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 3.90% level, while the yield of 10-year Treasuries settled near 4.35%.
If USD/JPY settles below 143.50, it will head towards the next support level at 140.00 – 140.50.
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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