U.S. Dollar Gains Ground Amid Rally In The Oil Markets: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher As Oil Prices Gain 5%

U.S. Dollar Index gains ground as traders prepare for the release of FOMC Minites and react to rising tensions in the Middle East.

President Trump said that U.S. could launch strikes against Iran and resume the blockade of country’s ports. Oil prices are up by more than 5% as traders react to the surprising escalation between U.S. and Iran. Rising oil prices could force Fed to be more hawkish, which is bullish for the American currency.

Currently, U.S. Dollar Index is trying to settle above the resistance at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 101.80 – 101.95 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

EUR/USD Retreats Amid Worries About Hawkish Fed

EUR/USD is losing ground as traders focus on the strong rally in the oil markets. Demand for risk assets declined amid inflation fears, which was bearish for the European currency.

EUR/USD settled below the 50 MA at 1.1414 and is trying to settle below the 1.1400 level. If EUR/USD settles below 1.1400, it will head towards the support level, which is located in the 1.1350 – 1.1365 range.

GBP/USD Rebounds From Session Lows

GBP/USD is swinging between gains and losses as traders focus on geopolitical tensions and evaluate their next moves.

In case GBP/USD manages to settle above the support level at 1.3335 – 1.3350, it will head towards the next resistance, which is located in the 1.3450 – 1.3465 range.

USD/CAD Pulls Back As Traders Ignore The Sell-Off In Precious Metals Markets

USD/CAD is losing some ground despite the strong pullback in precious metals markets. Gold is down by -1.5%, while silver pulled back by -4%. Other commodity-related currencies are mixed in today’s trading session.

In case USD/CAD stays below the 50 MA at 1.4203, it will head towards the nearest support level, which is located in the 1.4125 – 1.4140.

On the upside, a move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240. In case USD/CAD climbs above the 1.4240 level, it will head towards the next resistance, which is located in the 1.4335 – 1.4350 range.

USD/JPY Gains Ground As Treasury Yields Rise

USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries moved above the 4.23% level, while the yield of 10-year Treasuries settled above 4.58%. Treasury yields are rising as traders react to recent developments in the Middle East and bet on hawkish Fed. In case oil prices continue to move higher, the Japanese yen will find itself under additional pressure.

From the technical point of view, USD/JPY settled above the resistance at 161.50 – 162.00 and is moving towards multi-decade highs near 162.80. In case USD/JPY settles above the 162.80 level, it will head towards the 165.00 level. It remains to be seen whether the Bank of Japan is ready to intervene as yen’s fundamentals are extremely bearish. Previous attempts to support the yen yielded no results.

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