U.S. Dollar Gains Ground Amid Rising Geopolitical Risks: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Retreats From Session Highs

U.S. Dollar Index gains some ground as traders react to recent developments in the Middle East. Talks between U.S. and Iran did not lead to a deal, and U.S. has initiated its own blockade of the Strait of Hormuz.

U.S. aims to punish any vessel leaving Iran. According to recent reports, U.S. has already sent more than 15 warships to support the blockade.

Today, traders had a chance to take a look at the Existing Home Sales report for March. The report indicated that Existing Home Sales decreased by -3.6% month-over-month, compared to analyst forecast of -2.0%.

U.S. Dollar Index made an attempt to settle above the resistance at 98.85 – 99.00 but lost momentum and pulled back towards the 98.75 level. If U.S. Dollar Index settles below 98.50, it will head towards the nearest support, which is located in the 98.00 – 98.15 range.

EUR/USD Rebounds Despite Geopolitical Tensions

EUR/USD rebounded from session lows despite rising oil prices. Brent oil climbed above the $102.00 level as traders focused on the double blockade of the Strait of Hormuz.

It should be noted that ceasefire between U.S. and Iran is holding well, but traders wonder whether U.S. moves to stop traffic to and from Iran will break the fragile deal.

EUR/USD managed to stay above the support level at 1.1665 – 1.1680 and is trying to settle back above the 1.1700 level. In case this attempt is successful, EUR/USD will move towards the resistance level at 1.1765 – 1.1780.

GBP/USD Moves Towards The Resistance At 1.3470 – 1.3485

GBP/USD has also managed to rebound from session lows despite rising geopolitical risks. Traders are ready to bet that U.S. and Iran will reach a comprehensive peace deal.

The nearest resistance level for GBP/USD is located in the 1.3470 – 1.3485. If GBP/USD manages to settle above the 1.3485 level, it will move towards the next resistance at 1.3570 – 1.3585. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.

USD/CAD Tests Support At 1.3800 – 1.3815

USD/CAD pulled back as traders reacted to the strong rally in the oil markets. The pullback in precious metals markets did not put pressure on the Canadian dollar today. Other commodity-related currencies have also moved higher in today’s trading session.

Currently, USD/CAD is trying to settle below the support level at 1.3800 – 1.3815. If USD/CAD manages to settle below the 1.3800 level, it will head towards the next support at 1.3700 – 1.3715.

USD/JPY Is Stuck Near Key 160.00 Level

USD/JPY is stuck below the key resistance level at 160.00. Treasury yields are moving higher, providing additional support to the American currency. The yield of 2-year Treasuries settled above 3.81%, while the yield of 10-year Treasuries moved above 4.33%.

In case USD/JPY manages to settle above 160.00, it will gain additional upside momentum and move towards the next resistance, which is located in the 161.50 – 162.00 range. The key question is whether BoJ is ready to intervene in case USD/JPY climbs above the psychologically important 160.00 level.

In the near term, USD/JPY bulls will stay cautious due to intervention risks. However, a successful test of the 160.00 level could attract more speculative players.

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