The US Dollar Index (DXY) has gained ground as traders react to the latest ISM Manufacturing PMI report. The report showed an improvement in the PMI, rising from 46.7 in November to 47.4 in December. This positive data has provided support to the US dollar, pushing it higher against other major currencies. If the US Dollar Index can settle above the key level of 103.00, it is likely to head towards the next resistance level at 103.50 – 103.75.
EUR/USD continues to face pressure as traders focus on rising Treasury yields. The yield of 10-year Treasuries settled near the 4.00% level, providing additional support to the US dollar. As a result, EUR/USD is expected to stay below the 1.0925 level and head towards the next support level at 1.0810 – 1.0830.
GBP/USD has made several attempts to gain momentum and settle back above the 1.2650 level. However, it has lost momentum and pulled back. The Relative Strength Index (RSI) remains in the moderate territory, indicating a potential for further downside momentum if GBP/USD manages to settle below the 1.2600 level.
USD/CAD is moving higher despite the strong rebound in oil markets. Traders remain focused on the general strength of the US dollar, which is outweighing the impact of the rebound in oil prices. The nearest resistance for USD/CAD is located in the 1.3380 – 1.3410 range. A move above 1.3410 will push USD/CAD towards the next resistance level at 1.3480 – 1.3500.
USD/JPY has rallied as traders focused on rising Treasury yields. The ultra-dovish policy of the Bank of Japan (BoJ) makes USD/JPY particularly sensitive to Treasury yield dynamics. From a technical standpoint, USD/JPY has settled above the 50 MA and is moving towards the resistance level at 144.65 – 145.00.
The US dollar has strengthened against other major currencies as traders react to key economic indicators. The ISM Manufacturing PMI report, rising Treasury yields, and hawkish comments from the Federal Reserve have provided support to the US dollar. While some currencies, such as EUR/USD and GBP/USD, face pressure and have the potential for further downside momentum, others like USD/CAD and USD/JPY continue to move higher. Traders will need to closely monitor these factors as they navigate the forex market.
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