U.S. Dollar Gains Ground Despite Falling Treasury Yields: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Moves Higher As Traders Stay Focused On Middle East Tensions

U.S. Dollar Index gains ground as traders focus on tensions in the Middle East. Treasury yields are moving lower, but traders prefer the safety of the U.S. dollar.

The yield of 2-year Treasuries declined below the 3.90% level, while the yield of 10-year Treasuries pulled back towards 4.32%.

The nearest resistance level for U.S. Dollar Index is located in the 99.70 – 99.85 range. A move above the 99.85 level will push U.S. Dollar Index towards the next resistance, which is located in the 100.35 – 100.50 range.

EUR/USD Retreats As Traders React To Business Climate Data From Germany

EUR/USD pulls back as traders react to the Ifo Business Climate report from Germany. The report indicated that Business Climate declined from 88.4 in February (revised from 88.6) to 86.4 in March, compared to analyst forecast of 86.1.

Most likely, rising oil and natural gas prices will continue to put pressure on the Business Climate in Germany. Brent oil is currently trading above the $101.00 level, which is bearish for the European economy.

EUR/USD has recently made an attempt to settle above the resistance level at 1.1585 – 1.1600 but lost momentum and pulled back. In case EUR/USD manages to settle below the 1.1585 level, it will head towards the nearest support, which is located in the 1.1510 – 1.1525 range.

GBP/USD Pulls Back As UK Core Inflation Rate Rises To 3.2%

GBP/USD is losing ground as traders focus on inflation reports from the UK. Inflation Rate remained unchanged at 3% in February, in line with analyst expectations.

Core Inflation Rate increased from 3.1% in January to 3.2% in February, while analysts expected that it would remain unchanged at 3.1%. It should be noted that rising energy prices will have an impact on March data.

If GBP/USD settles below the 1.3350 level, it will get to the test of the support at 1.3315 – 1.3330. A move below the 1.3315 level will push GBP/USD towards the 1.3250 level.

On the upside, GBP/USD needs to settle back above the resistance at 1.3400 – 1.3415 to have a chance to gain sustainable upside momentum in the near term. In this case, GBP/USD will head towards the next resistance at 1.3480 – 1.3495.

USD/CAD Tests Resistance At 1.3800 – 1.3815

USD/CAD is moving higher as demand for commodity-related currencies declined despite rising commodity markets. Traders worry that high energy prices will put significant pressure on global economy, which is bearish for commodity-related currencies in the long term.

Currently, USD/CAD attempts to settle above the resistance level at 1.3800 – 1.3815. If USD/CAD manages to settle above the 1.3815 level, it will move towards the next resistance at 1.3885 – 1.3900.

USD/JPY Moves Higher As Traders Bet On Dovish BoJ

USD/JPY gains ground as traders ignore falling Treasury yields and focus on the weakness of the Japanese economy.

There are no signs of interventions from the BoJ. It looks that BoJ will not intervene below the 160.00 level.

From the technical point of view, USD/JPY settled above the support at 158.00 – 158.50 and is heading towards the 159.50 level. If USD/JPY climbs above 159.50, it will move towards the psychologically important 160.00 level. A move above 160.00 will push USD/JPY towards the resistance at 161.50 – 162.00.

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