U.S. Dollar Strengthens as Traders React to ISM Services PMI Data
The U.S. Dollar is gaining strength as traders react to the latest ISM Services PMI report. The report indicated a slight decline in the index from 55.4 in August to 54.9 in September, missing analyst expectations of 55. Despite this weaker-than-expected data, the dollar remains resilient. The U.S. Dollar Index is attempting to settle above the key resistance level of 102.35-102.50, with potential to target the next resistance at 103.35-103.50 if it manages to break above this threshold.
EUR/USD is under pressure, testing support at 1.1175-1.1190. The pair remains vulnerable despite a pullback in oil prices, which have dropped by around 2%. If EUR/USD breaks below the 1.1175 level, it could head towards the next support at 1.1085-1.1100. The Relative Strength Index (RSI) has moved back into moderate territory, suggesting potential for further declines if negative catalysts emerge.
GBP/USD is also moving lower, influenced by rising Treasury yields. The yield on 2-year Treasuries climbed towards 4.85%, while the 10-year yield settled above 5.33%. The nearest support level for GBP/USD is at 1.3150-1.3165, with a potential drop to 1.3035-1.3050 if the pair breaks below this level. European bond markets are also under pressure, contributing to the bearish sentiment.
USD/CAD is gaining ground despite the pullback in oil prices. The pair is attempting to settle above the resistance level of 1.4235-1.4250, with potential to target 1.4350-1.4365 if it breaks above this level. Other commodity-related currencies are mixed, but USD/CAD is benefiting from a lack of positive catalysts for the Canadian dollar.
USD/JPY is moving higher, supported by rising Treasury yields and Japan’s Consumer Confidence report. The report showed a slight decline in consumer confidence from 35.5 in August to 35.4 in September, slightly above the forecast of 35.3. USD/JPY is attempting to settle above the resistance level of 158.00-158.50, with potential to target 160.00-160.50 if it breaks above this level. Traders remain cautious, however, due to concerns that the Bank of Japan may intervene to support the yen.