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USD Rebound Caps EUR/USD, Traders Await ECB & Fed Decisions


The EUR/USD pair is struggling to break through 1.1150 as the US Dollar rebounds. Traders are hesitant to make any new bets before the upcoming ECB and Fed decisions. Technical indicators suggest that there may be more room for the pair to drop before reaching oversold levels.

Support levels for the pair are seen at 1.1100, 1.1050, and 1.1000, while resistance levels are at 1.1160, 1.1180, and 1.1200.

EUR/USD slipped below 1.1200 on Thursday and remains quiet above 1.1100 on Friday. The near-term outlook is bearish, but investors may hold off on making big moves ahead of next week’s important economic events.

The strong US labor market data caused a rise in US Treasury bond yields and boosted the US Dollar. However, a positive opening in Wall Street could challenge the Dollar’s strength.

Despite the lack of major data releases, all eyes are on the ECB and Fed decisions next week. Folow the TraderFactor’s Economic Calendar for hourly updates.

Canadian Dollar Swings Lower Against US Dollar as Retail Sales Disappoint

Disappointing Canadian Retail Sales data for May has caused the Canadian Dollar (CAD) to weaken against the US Dollar (USD).

Retail Sales only increased by 0.2%, falling short of the expected 0.5% and showing a decline from the previous month’s 1.0% growth, according to Statistics Canada.

Meanwhile, the USD is benefitting from traders moving away from the Japanese Yen (JPY) ahead of the Bank of Japan’s policy meeting next week.

The expectation is that the BoJ will maintain its current loose policy, prompting investors to favor the US Dollar over the JPY. As the US session begins, the USD/CAD pair is currently being traded in the 1.31s.

These developments suggest that the Canadian Dollar is under pressure due to weakening consumer spending and the potential for lower inflation and interest rates.

On the other hand, the US Dollar is strengthened by positive Initial Jobless Claims data, indicating a significant drop in new unemployment claims. This points to the likelihood of continued inflationary pressures and higher interest rates, making the US Dollar an appealing choice for investors.

The USD/CAD exchange rate is influenced by various economic factors, providing both challenges and opportunities for traders.

USD/JPY Skyrockets as Bank of Japan Remains Dovish Despite Strong Inflation

In a surprising twist, the Bank of Japan (BoJ) has announced its determination to maintain its dovish stance, even in the face of impressive inflation data. Despite the Consumer Price Index (CPI) for June showing a year-on-year increase of 3.3% (slightly higher than before but falling short of expectations), the USD/JPY has not been deterred and continues to climb.

During the Asian trading session, the USD/JPY was hovering around 140.00. However, an influential Reuters report exposing the BoJ’s unwavering commitment to its Yield Curve Control (YCC) program sparked a significant change. As a result, the USD/JPY surged past 141.00, hitting a peak of 141.71 after a minor dip to 139.74.

The USD/JPY uptrend is projected to persist due to interest rate disparities, but all attention is now focused on the imminent decisions of the Federal Reserve and the Bank of Japan. With the BoJ steadfast in its dovish stance, market participants are closely monitoring any potential impact on the USD/JPY.

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Author

  • Phyllis Wangui

    Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.