The U.S. Dollar Index faces downward pressure as the Japanese yen rallies on potential BoJ intervention and commodity-linked currencies gain ground on rising oil prices.
The U.S. Dollar Index is currently losing momentum due to a lack of major economic catalysts during the U.S. Labor Day holiday. Technical indicators, specifically the RSI, suggest there is significant room for further downside as the index tests the critical support range of 98.60–98.75.
If the index settles below 98.60, the next support range is 97.70–97.85.
USD/JPY is testing new lows driven by market expectations of a Bank of Japan rate hike and suspected currency intervention. Data showing a $80 billion drop in Japan's foreign reserves suggests active efforts to support the yen, pushing the pair toward the 155.00 support level.
The pair is expected to head toward the next support level at 152.50–153.00.
EUR/USD has gained ground despite weak German industrial production data, which showed a 1.1% decline. While political uncertainty following the AfD party's success in Saxony-Anhalt is noted, it is not currently impacting the currency's short-term dynamics, allowing the pair to focus on broader dollar weakness.
If the pair stays above 1.1615, it will target the 1.1685–1.1700 resistance range.
The British pound is moving higher as traders prioritize general U.S. dollar weakness over domestic economic concerns. Despite a disappointing Lloyds House Price Index report showing a 0.4% year-over-year decline, the pair is attempting to break through resistance at 1.3550–1.3565.
The next resistance level is located at 1.3635–1.3650.
USD/CAD is declining as the Canadian dollar benefits from a rally in oil prices. The pair failed to sustain a move above the 1.3825–1.3840 resistance range, and technical indicators suggest a potential test of lower support levels if it drops below 1.3800.
If the pair declines below 1.3800, the nearest support is located at 1.3750–1.3765.
The U.S. Dollar Index is losing momentum, testing support levels near 98.60 amid thin Labor Day trading volumes. Meanwhile, the Japanese yen is strengthening on speculation of Bank of Japan intervention, while the euro and British pound capitalize on broad dollar weakness despite lackluster regional economic data.
The index is losing ground due to broad market weakness and a lack of major economic catalysts during the U.S. Labor Day holiday.
The yen is rallying on expectations of a Bank of Japan rate hike and suspected official intervention to support the currency.