The U.S. Dollar Index (DXY) has recently tested new lows, mainly due to the release of the PCE Price Index report. This report highlighted a decline in the PCE Price Index from 2.9% in October to 2.6% in November. However, the American currency received some support from the better-than-expected Michigan Consumer Sentiment report. If the U.S. Dollar Index continues to settle below the support at 101.75 – 102.00, it is likely to head towards the next support level at 100.50 – 100.80.
The EUR/USD pair has been relatively flat lately, mainly due to a lack of catalysts for the Euro. Traders will need to wait until the new year for fresh economic reports that might influence the currency. During the recent period, EUR/USD attempted to rise above the resistance at 1.1035 but lacked the necessary momentum and pulled back. If the pair moves below the key level of 1.1000, it will potentially test the nearest support level in the range of 1.0925 – 1.0950.
The GBP/USD pair has seen some gains recently, primarily due to the release of the better-than-expected UK Retail Sales report. This report revealed a month-over-month increase of 1.3% in November. However, the third-quarter GDP growth rate fell short of analyst expectations, coming in at +0.3% instead of the predicted +0.6%. Despite this, the relative strength index (RSI) remains in the moderate territory, suggesting that there is still potential for momentum. It remains to be seen whether traders will be prepared for significant movements in the market leading up to Christmas.
The USD/CAD pair experienced a rebound from session lows following the release of Canada’s GDP report. This report indicated that GDP remained unchanged in October, contrary to analyst consensus predictions of a 0.2% increase. As long as USD/CAD stays below the 1.3275 level, it is expected to move towards the next support level at 1.3125 – 1.3150.
The USD/JPY pair has been showing signs of gaining ground, primarily due to the upward movement of Treasury yields. However, moving below the support at 141.00 – 141.50 may require significant catalysts, as the Bank of Japan’s policy remains extremely dovish, which is bearish for the yen.
It is important for forex traders to stay updated on the latest market trends and events that may impact currency pairs. The recent performance of the U.S. Dollar Index, EUR/USD, GBP/USD, USD/CAD, and USD/JPY highlights the significance of various economic reports and market sentiment. By closely following these trends and understanding the potential impact of key events, traders can make informed decisions to maximize their trading strategies.