U.S. Dollar Moves Higher As CPI Meets Estimates: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Rebounds As Traders React To Inflation Data

U.S. Dollar Index gains ground as traders react to CPI data. Inflation Rate remained unchanged at 2.4% in February, in line with analyst estimates.

Core Inflation Rate was unchanged at 2.5%. The report has also met analyst expectations.

It should be noted that this report does not reflect the impact of the war in the Middle East. Traders will have to wait for March numbers to evaluate the impact of the major rally in oil and natural gas markets.

Currently, U.S. Dollar Index is trying to settle above the resistance at 98.90 – 99.05. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 99.70 – 99.85 range.

EUR/USD Tests Support At 1.1585 – 1.1600

EUR/USD is under pressure as traders focus on rising oil prices. IEA members agreed to release as much as 400 million barrels of oil from reserves to cool prices, but markets do not believe that this move would break the upside trend.

Rising energy prices are bearish for the European economy. Meanwhile, the war in the Middle East continues, and traders prepare for a lengthy conflict.

EUR/USD attempts to settle below the support at 1.1585 – 1.1600. If EUR/USD manages to settle below the 1.1585 level, it will move towards the next support, which is located in the 1.1510 – 1.1525 range.

GBP/USD Attempts To Settle Below 1.3400

GBP/USD is under pressure as demand for riskier assets declines due to rising oil prices.

Treasury yields continue to move higher, providing additional support to the U.S. dollar. The yield of 2-year Treasuries climbed towards the 3.65% level, while the yield of 10-year Treasuries moved above the 4.20% level.

If GBP/USD settles below the 1.3400 level, it will get to the test of the 50 MA at 1.3381. A move below the 50 MA will push GBP/USD towards the next support level at 1.3315 – 1.3330.

USD/CAD Tests Resistance At 1.3585 – 1.3600

USD/CAD is moving higher as traders react to the pullback in precious metals markets and focus on general strength of the American currency.

Gold pulled back below the $5200 level, while silver declined towards the $85.00 level. Other commodity-related currencies were mixed in today’s trading.

A successful test of the resistance level at 1.3585 – 1.3600 will push USD/CAD towards the 50 MA at 1.3633. If USD/CAD manages to settle above the 50 MA, it will head towards the next resistance at 1.3650 – 1.3665.

USD/JPY Is Moving Towards The 159.00 Level

USD/JPY is heading towards the 159.00 level as traders focus on rising Treasury yields and high oil prices.

There are no signs of interventions from the BoJ. It remains to be seen whether Bank of Japan is ready to provide support to the Japanese yen at current levels.

High energy prices will put significant pressure on the Japanese economy, and weaker yen may offer some protection, making Japan’s exports more competitive in global markets.

In addition, the BoJ may doubt that it could defend the yen in the current environment. Perhaps, the central bank is waiting for higher USD/JPY levels before it will be ready to act.

In case USD/JPY climbs above the 159.00 level, it will head towards the resistance level, which is located in the 161.50 – 162.00 range.

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