U.S. Dollar Moves Higher As Inflation Rate Drops To 3.4%
U.S. Dollar Index gains some ground as traders focus on CPI report. The report indicated that Inflation Rate declined from 3.5% in June to 3.4% in July, in line with analyst estimates. Core Inflation Rate decreased from 2.6% to 2.5%. Core Inflation Rate has also met analyst expectations.
Currently, U.S. Dollar Index is trying to settle above the resistance level at 99.85 – 100.00. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.
EUR/USD Retreats After U.S. CPI Report
EUR/USD pulled back as traders focused on U.S. inflation data. Traders also monitored the dynamics of the oil markets. Oil prices were swinging between gains and losses amid geopolitical uncertainty and did not have a material impact on forex market dynamics.
The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. in case EUR/USD declines below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
GBP/USD Pulls Back From Weekly Highs
GBP/USD moved away from session highs as traders reacted to U.S. CPI report. It looks that some traders hoped that U.S. inflation numbers would be lower than analyst estimates.
In case GBP/USD manages to settle below the 1.3500 level, it will head towards the support level at 1.3465 – 1.3480. A move below the 1.3465 level will push GBP/USD towards the next support, which is located in the 1.3335 – 1.3350 range.
On the upside, GBP/USD needs to settle above the resistance at 1.3550 – 1.3565 to have a chance to gain upside momentum in the near term.
USD/CAD Rebounds From Multi-Week Lows
USD/CAD attempts to rebound despite rising precious metals markets. Gold settled above the $4400 level, while silver made an attempt to settle above $66.00. Other commodity-related currencies were mixed in today’s trading session.
If USD/CAD settles above the 1.3950 level, it will head towards the 50 MA at 1.3995. A move above the 50 MA will push USD/CAD towards the resistance level at 1.4010 – 1.4025.
On the support side, USD/CAD needs to settle back below the 1.3920 level to gain downside momentum in the near term. In this case, USD/CAD will head towards the support at 1.3825 – 1.3840.
USD/JPY Moves Back Towards The 159.50 Level
USD/JPY gains some ground despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.19% level, while the yield of 10-year Treasuries settled below 4.68%.
