EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Gains Ground As Treasury Yields Rebound

Key Insights

• EUR/USD is mostly flat as traders react to the Ifo Business Climate report from Germany. 
• GBP/USD settled below the 1.2150 level as traders focused on rising Treasury yields. 
• USD/CAD tested new highs after BoC left the interest rate unchanged.

U.S. Dollar

U.S. Dollar Index gains ground as traders react to the New Home Sales report, which showed that New Home Sales increased by 12.3% month-over-month in September.

If U.S. Dollar Index manages to settle above the 106.50 level, it will head towards the next resistance, which is located in the 106.90 – 107.20 range.

EUR/USD

EUR/USD is mostly flat as traders wait for additional catalysts after the release of disappointing PMI data from the Eurozone. Germany’s Ifo Business Climate report showed that Business Climate improved from 85.8 in September to 86.9 in October but did not provide additional support to the European currency.

From the technical point of view, EUR/USD failed to settle above the resistance at 1.0670 – 1.0700 and is moving towards the nearest support at 1.0520 – 1.0550.

GBP/USD

GBP/USD is losing some ground as traders focus on rising Treasury yields. The yield of 10-year Treasuries moved back above the 4.90% level, while the yield of 30-year Treasuries climbed above 5.05%.

RSI remains in the moderate territory, so GBP/USD has a decent chance to gain additional downside momentum and move closer to the nearest support at 1.2000 – 1.2030.

USD/CAD

USD/CAD tested new highs after BoC left the interest rate unchanged at 5%, in line with the analyst consensus.

USD/CAD has recently made an attempt to settle above the resistance at 1.3800 – 1.3830. A move above 1.3830 will push USD/CAD towards 2022 highs near 1.3975.

USD/JPY

USD/JPY remains stuck below the key 150.00 level. Bulls are afraid that BoJ will intervene in case USD/JPY moves above 150.00.

The technical picture remains unchanged, but it looks that bulls will ultimately try to test whether BoJ has enough resources to protect the yen.

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