U.S. Dollar Regains Strength on ISM Services Beat – EUR/USD, GBP/USD, USD/CAD & USD/JPY Analysis

Date: May 6, 2025
Author: DailyForex.pk News Desk

The U.S. dollar rebounded sharply from intraday lows on Monday following stronger-than-expected ISM Services PMI data, offering support across major dollar pairs including EUR/USD, GBP/USD, USD/CAD, and USD/JPY.

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📈 U.S. Dollar Index (DXY): Targets 100.40 Amid PMI Surprise

The U.S. Dollar Index (DXY) climbed after the ISM Services PMI for April came in at 51.6, beating both the previous reading of 50.8 and market forecasts of 50.6. This upbeat data reinforced optimism around U.S. economic resilience ahead of the Federal Reserve’s policy decision this week.

• Key Resistance Levels: 100.20 – 100.40
• Breakout Above 100.40: Could trigger a bullish move toward 101.40 – 101.60

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💶 EUR/USD Pulls Back Amid Mixed U.S. Data

The EUR/USD pair retreated from session highs as traders digested mixed U.S. economic releases. While the ISM Services PMI surprised to the upside, S&P Global Services PMI fell from 54.4 to 50.8, missing expectations of 51.4.

• Support Zone: 1.1275 – 1.1290
• Break Below: Opens the path toward 1.1110 – 1.1130

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💷 GBP/USD Trades Sideways Ahead of Fed Decision

The British Pound showed muted movement on Monday, reflecting caution ahead of the FOMC rate announcement on Wednesday. With no major UK catalysts, traders remain focused on U.S. macro signals.

• Immediate Support: 1.3250
• Next Key Support Zone: 1.3200 – 1.3220

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🇨🇦 USD/CAD Holds Near 1.3800 Despite Oil Weakness

The Canadian Dollar stayed under pressure as USD/CAD hovered near key support at 1.3800, despite a pullback in oil prices. A break above the 50-day Moving Average could tilt momentum further in favor of the USD.

• Upside Target: 1.3840 (50 MA), then 1.3930 – 1.3950

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💴 USD/JPY Drops Despite Climbing Treasury Yields

In a divergence from typical behavior, USD/JPY edged lower despite rising U.S. Treasury yields. The pair tested the 143.50 – 144.00 support zone even as the 2-year and 10-year yields climbed to 3.85% and 4.35%, respectively.

• Support to Watch: 143.50
• Break Below: May trigger a fall toward 141.50 – 142.00

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🔍 Market Outlook

With the Federal Reserve policy meeting looming, currency markets are expected to remain volatile. Traders are closely watching U.S. macroeconomic data, interest rate guidance, and geopolitical headlines for further cues.

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