U.S. Dollar Moves Higher As Oil Gains 5%: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Gains Ground As Oil Prices Rally

U.S. Dollar Index gains ground as traders focus on geopolitical developments. President Trump said that U.S. will impose a naval blockade on Iranian ports. He added that U.S. will become a “guardian” in the Strait of Hormuz and would charge fees at a rate of 20% on all cargo shipped.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 101.80 – 101.95 range.

EUR/USD Retreats As Traders Bet On Hawkish Fed

EUR/USD pulled back as traders focused on the strong rally in the oil markets. Brent oil gained 5% as the flow of oil through the Strait of Hormuz would drop after U.S. decision to impose a naval blockade on Iran. Most likely, Iran will try to attack vessels passing through the Strait without the country’s permission.

EUR/USD failed to settle above the resistance at 1.1420 – 1.1435 and pulled back towards the 1.1400 level. If EUR/USD manages to settle below the 1.1400 level, it will head towards the nearest 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 additional downside momentum in case the right catalysts emerge.

GBP/USD Pulls Back Amid Rising Geopolitical Tensions

GBP/USD moved lower as traders worried that rising oil prices will force the Fed to raise rates sooner rather than later, which would be bullish for the American currency.

In case GBP/USD declines below the 50 MA at 1.3366, it will get to the test of the support at 1.3335 – 1.3350. A move below the 1.3335 level will open the way to the test of the next support level at 1.3250 – 1.3265.

USD/CAD Remains Stuck Near Support At 1.4125 – 1.4140

USD/CAD continued its attempts to settle below the support at 1.4125 – 1.4140 despite the strong pullback in precious metals markets. Gold declined towards the psychologically important $4000 level, while silver pulled back below $58.00. Other commodity-related currencies were mixed in today’s trading session.

If USD/CAD settles below the 1.4125 level, it will move towards the support level at 1.4010 – 1.4025. On the upside, USD/CAD needs to stay above the 1.4140 level to have a chance to gain upside momentum in the near term. In this case, USD/CAD will head towards the 50 MA at 1.4185. A move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240.

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 4.25% level, while the yield of 10-year Treasuries settled above 4.60%.

If USD/JPY stays above the support level at 161.50 – 162.00, it will move towards recent highs near the 162.80 level. In case USD/JPY manages to settle above 162.80, it will gain additional upside momentum and head towards the 165.00 level. It remains to be seen whether Bank of Japan is ready to provide support to the Japanese yen.

If you’d like to know more about how to trade forex, please visit our educational area.