U.S. Dollar Gains Ground As Oil Prices Test New Highs: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher Amid Rising Demand For Safe-Haven Assets

U.S. Dollar Index gains ground as traders react to rising oil prices. WTI oil moved above the $84.00 level amid rising tensions in the Middle East. Demand for safe-haven assets increased, which was bullish for the U.S. dollar.

Treasury yields are moving higher as bond traders bet that high oil prices will force Fed to raise rates. The yield of 2-year Treasuries climbed above the 4.25% level, while the yield of 10-year Treasuries settled above 4.63%. Rising Treasury yields provided additional support to 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 move towards the resistance level at 101.80 – 102.00.

EUR/USD Attempts To Settle Below The 1.1400 Level

EUR/USD is mostly flat as traders focus on the Euro Area ZEW Economic Sentiment Index report. The report indicated that Economic Sentiment increased from 9.5 in June to 23.4 in July, compared to analyst forecast of 11.2.

If EUR/USD stays below the support level at 1.1420 – 1.1435, it will head towards the next support, which is located in the 1.1350 – 1.1365 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

GBP/USD Retreats As Pullback Continues

GBP/USD remains under pressure as traders stay focused on first moves of new UK Prime Minister and react to the UK Unemployment Rate report. The report indicated that Unemployment Rate remained unchanged at 4.9% in May, compared to analyst forecast of 5.0%.

The nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range. If GBP/USD manages to settle below the 1.3335 level, it will head towards the next support at 1.3250 – 1.3265.

USD/CAD Gains Ground Amid Rising Treasury Yields

USD/CAD is moving higher as traders focus on rising Treasury yields and ignore the rally in precious metals markets. Gold moved above the $4050 level, while silver settled above $59.00. Other commodity-related currencies are mixed in today’s trading session.

In case USD/CAD stays above the 50 MA at 1.4083, it will move towards the resistance at 1.4125 – 1.4140. A successful test of the resistance at 1.4125 – 1.4140 will open the way to the test of the next resistance level at 1.4235 – 1.4250.

USD/JPY Tests Multi-Decade Highs

USD/JPY is trying to settle above the 163.00 level as traders ignore intervention risks and focus on the fundamental weakness of the Japanese currency.

Rising Treasury yields put significant pressure on the Japanese yen due to the ultra-dovish policy of the Bank of Japan. High oil prices serve as an additional bearish catalyst as Japanese economy is dependent on energy imports. A combination of higher Treasury yields and rising oil prices pushed the Japanese yen towards multi-decade lows.

In case USD/JPY settles above the 163.00 level, it will head towards the 165.00 level. RSI is in the overbought territory, but there is enough room to gain additional momentum in the near term. Potential BoJ interventions are the key risk for the bulls.

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