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

U.S. Dollar Rebounds As Oil Markets Rally

U.S. Dollar Index gains some ground as traders focus on the strong rally in the oil markets. Oil prices are up by +5% as U.S. and Iran did not reach any deal over the weekend. President Trump signaled that he would use economic pressure to force Iran back to negotiations.

High oil prices may push inflation towards higher levels and force the Fed to raise rates at the next meeting in September, which will be bullish for the American currency.

The nearest resistance level for U.S. Dollar Index is located in the 99.85 – 100.00 range. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.

EUR/USD Moves Away From Multi-Week Highs

EUR/USD moved lower as traders took some profits off the table near multi-week highs. There are no important economic reports scheduled to be released in the EU today, so traders will stay focused on general market sentiment.

The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. If EUR/USD declines below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450. 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 Tests New Highs

GBP/USD climbed above the 1.3500 level as traders ignored rising oil prices and bet on dovish Fed.

In case GBP/USD stays above 1.3500, it will head towards the nearest resistance level at 1.3550 – 1.3565. A move above the 1.3565 level will push GBP/USD towards the 1.3650 level.

On the support side, a move below the support at 1.3465 – 1.3480 will open the way to the test of the 50 MA at 1.3444. If GBP/USD manages to settle below the 50 MA, it will head towards the next support level at 1.3335 – 1.3350.

USD/CAD Attempts To Settle Below The Support At 1.3920 – 1.3935

USD/CAD pulls back as traders focus on rising precious metals markets. Gold climbed above the $4350 level, while silver settled above $65.00. Other commodity-related currencies are mostly flat in today’s trading session.

Currently, USD/CAD is trying to settle below the support at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level, which is located in the 1.3825 – 1.3840 range.

USD/JPY Moves Higher As Treasury Yields Rise

USD/JPY gains ground as the yen continues to lose ground after interventions. Rising Treasury yields provide additional support to USD/JPY. The yield of 2-year Treasuries climbed above the 4.23% level, while the yield of 10-year Treasuries settled near 4.70%.

At this point, forex traders are not worried that BoJ would intervene again to support the yen. Fundamentally, the yen remains weak due to the difference in interest rates in U.S. and Japan.

If USD/JPY settles above the 50 MA at 158.84, it will head towards the resistance level at 159.50 – 160.00. A move above the 160.00 level will push USD/JPY towards the 162.00 level.

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