The U.S. Dollar Index has recently tested new lows due to the decline in the PCE Price Index. According to the latest report, the index fell from 2.9% in October to 2.6% in November. This downward trend has raised concerns among traders, leading to a decrease in the value of the American currency. However, the 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 level at 101.75 – 102.00, it is likely to head towards the next support level located in the range of 100.50 – 100.80.
The Euro to USD exchange rate has remained largely unchanged in recent times due to the lack of significant catalysts for the Euro. Traders will have to wait until the next year for new economic reports that could potentially impact the currency. Although there was an initial attempt by the EUR/USD pair to break above the resistance level at 1.1035, it subsequently lost momentum and pulled back. A move below the psychological level of 1.1000 could indicate a shift towards testing the nearest support level at 1.0925 – 1.0950.
The GBP/USD pair experienced a boost as traders focused on the better-than-expected UK Retail Sales report. The report showed a 1.3% month-over-month increase in retail sales for November. However, the third-quarter GDP growth rate of +0.3% fell short of analyst expectations of +0.6%. Despite this, the Relative Strength Index (RSI) remains in the moderate territory, indicating potential for further upward momentum. It remains to be seen whether traders are willing to make significant movements ahead of the Christmas holiday.
The USD/CAD pair rebounded from session lows as traders reacted to Canada’s GDP report, which indicated no change in GDP for October, contrary to analyst consensus of +0.2%. If the USD/CAD pair continues to stay 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 seen some gains as Treasury yields rise. However, moving below the support level at 141.00 – 141.50 will require significant catalysts, considering the extremely dovish approach of the Bank of Japan’s (BoJ) policy, which is generally bearish for the yen.
The forex market has experienced mixed trends in recent times. While the U.S. Dollar Index faces downward pressure due to the decline in the PCE Price Index, the Euro remains stable amidst a lack of significant developments. The British Pound gained momentum on positive retail sales, but its GDP growth rate fell short of expectations. Meanwhile, the Canadian Dollar rebounded as Canada’s GDP remained unchanged, and the USD/JPY pair gained ground due to rising Treasury yields. As traders navigate these fluctuations, it is essential to stay informed about upcoming economic events by referring to the economic calendar.