U.S. Dollar Gains Ground: In-depth Analysis of EUR/USD, GBP/USD, USD/CAD, and USD/JPY

U.S. Dollar Index Movement

The U.S. Dollar Index gained ground as traders reacted to PMI reports. The Manufacturing PMI decreased from 47.9 in August to 47.0 in September, missing analyst expectations of 48.5. The manufacturing sector remains under pressure, while Services PMI showed a minor pullback from 55.7 to 55.4. Notably, numbers above 50 indicate expansion.

Despite this, the U.S. Dollar Index attempted to settle above the 101.00 level but lacked momentum. A decline below 100.80 could lead towards support between 99.55 and 99.75.

EUR/USD Reaction to PMI Reports

In the currency pair EUR/USD, traders reacted negatively to weak PMI data. The Euro Area Manufacturing PMI fell from 45.8 in August to 44.8 in September, while Services PMI decreased from 52.9 to 50.5. If EUR/USD settles below the support at 1.1115 – 1.1130, it may drop towards the next support level in the 1.1000 – 1.1015 range.

GBP/USD Continues to Rally

The GBP/USD tested new highs following the release of PMI reports. While the UK Manufacturing PMI declined from 52.5 in August to 51.5 in September, it matched analyst consensus. The UK Services PMI slightly missed expectations, decreasing from 53.7 to 52.8.

Should GBP/USD surpass the 1.3350 level, it could target the nearest resistance at 1.3420 – 1.3440.

USD/CAD and Commodity Influence

For USD/CAD, the pair pulled back despite a strong pullback from the oil markets, indicating rising demand for commodity-related currencies supporting the Canadian dollar. A move below the 1.3480 – 1.3500 support could lead to testing lower levels at 1.3360 – 1.3380.

USD/JPY Fails to Break Out

Lastly, the USD/JPY made an attempt to settle above the 144.00 level but ultimately lost momentum, remaining within a downward channel, suggesting bearish sentiments ahead.

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