U.S. Dollar Dives On Middle East Ceasefire: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Retreats As Demand For Safe-Haven Assets Drops

U.S. Dollar Index is losing ground as traders react to ceasefire in Iran. U.S. and Iran agreed to a two-week ceasefire and will try to negotiate a peace deal.

Israel continued its operation against Hezbollah as the country believed that actions in Lebanon were not part of a ceasefire deal. Iran disagreed and blocked the Strait of Hormuz again, providing some support to the American currency.

It should be noted that ceasefires in complicated conflicts are not easy to achieve in practice. It remains to be seen whether current ceasefire will hold.

Currently, U.S. Dollar Index is trying to settle below the support level at 98.85 – 99.00. In case this attempt is successful, U.S. Dollar Index will move towards the next support, which is located in the 98.00 – 98.15 range.

EUR/USD Soars As Oil Prices Collapse

EUR/USD rallied as traders reacted to the sell-off in the oil markets. Brent oil declined below the $95.00 level as traders focused on the ceasefire in the Middle East.

In the EU, traders focused on the Euro Area Retail Sales report. The report showed that Retail Sales decreased by -0.2% month-over-month in February, in line with analyst expectations.

EUR/USD attempts to settle above the resistance level at 1.1665 – 1.1680. If EUR/USD manages to stay above the 1.1680 level, it will head towards the next resistance at 1.1765 – 1.1780. RSI is in the overbought territory, but there is enough room to gain additional upside momentum in the near term.

GBP/USD Tests Resistance At 1.3470 – 1.3485

GBP/USD gained strong upside momentum, supported by geopolitical developments.

In the UK, traders had a chance to take a look at the Halifax House Price Index report for March. The report indicated that house prices declined by -0.5% month-over-month, compared to analyst forecast of +0.1%.

UK Construction PMI increased from 44.5 in February to 45.6 in March, while analysts expected that it would drop to 43.9. Numbers below 50 show contraction.

The nearest resistance level for GBP/USD is located in the 1.3470 – 1.3485 range. A move above the 1.3485 level will push GBP/USD towards the next resistance level at 1.3570 – 1.3585.

USD/CAD Moves Lower As Precious Metals Markets Rally

USD/CAD is moving lower despite the sell-off in the oil markets. Traders react to the strong rally in precious metals markets and focus on general weakness of the American currency. Other commodity-related currencies gained strong upside momentum in today’s trading session.

From the technical point of view, USD/CAD is moving towards the support level at 1.3800 – 1.3815. If USD/CAD declines below the 1.3800 level, it will head towards the next support at 1.3700 – 1.3715.

USD/JPY Tests Support At 158.00 – 158.50

USD/JPY attempts to settle below the support level at 158.00 – 158.50 as traders focus on falling Treasury yields and react to the sell-off in the oil markets.

Falling oil prices are bullish for the Japanese yen as Japan’s economy is highly dependent on energy imports. The yield of 2-year Treasuries pulled back towards the 3.75% level as traders focused on the ceasefire in the Middle East, which was bearish for USD/JPY.

A move below the 158.00 level will open the way to the test of the support level at 154.50 – 155.00. RSI has recently moved back into moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

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