The US dollar is retreating from recent highs, moving into a moderate correction after a prolonged period of gains. Pressure on the currency is building amid weaker-than-expected macroeconomic data, while market participants adopt a wait-and-see approach ahead of key labour market releases, including the ADP report.

The current dynamics reflect a gradual cooling in expectations regarding the resilience of the US economy. Recently published indicators point to a slowdown in business activity and easing labour market tightness, reducing support for the dollar after it reached local highs. At the same time, upcoming releases remain a key factor that could either reinforce the corrective move or restore demand for the US currency.

Among the published figures, investors focused on mixed US macro data. The Chicago PMI fell to 52.8 versus expectations of 54.8, signalling a slowdown in the manufacturing sector. In addition, JOLTS job openings came in below forecasts (6.882 million vs 7.240 million), indicating a gradual cooling in the labour market. Further pressure came from regional business activity indices, including data from the Dallas Fed, which reinforced doubts about the sustainability of the current economic momentum.

USD/JPY

After reaching fresh yearly highs and testing the psychological 160.00 level, USD/JPY has moved lower, forming a corrective pullback. Technical analysis suggests a potential decline towards the 157.50–158.00 area, as a dark cloud cover pattern has formed on the daily timeframe.

If the price consolidates above the 159.40–159.80 range, the bearish correction scenario may be invalidated.

Key events for USD/JPY:

• today at 15:15 (GMT+3): US ADP non-farm employment change
• today at 15:30 (GMT+3): US core retail sales
• today at 16:45 (GMT+3): US manufacturing PMI

USD/CAD

USD/CAD is also showing a pullback from local highs following a strong rally. The formation of an Evening Star pattern near the 1.3930 level indicates a slowdown in bullish momentum and the potential for a correction towards 1.3860–1.3880.

At the same time, a move above 1.3970 could support a resumption of the uptrend and the formation of a new bullish impulse.

Key events for USD/CAD:

• today at 16:30 (GMT+3): Canada manufacturing PMI
• today at 17:30 (GMT+3): US crude oil inventories
• today at 18:30 (GMT+3): Atlanta Fed GDPNow indicator

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