U.S. Dollar Moves Higher As WTI Oil Climbs Above $110: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Rebounds As Oil Markets Rally

U.S. Dollar Index gains ground as traders focus on the huge rally in the oil markets. WTI oil climbed above the $110 level as traders reacted to Trump’s comments on Iran.

President Trump indicated that U.S. will continue the war in the Middle East, which was bullish for oil markets.

Traders also focused on the Initial Jobless Claims report. The report indicated that 202,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 212,000.

From the technical point of view, U.S. Dollar Index settled between the support at 99.70 – 99.85 and the resistance at 100.35 – 100.50. A move above the 100.50 level will push U.S. Dollar Index towards the 101.00 level.

EUR/USD Retreats As Traders React To Rising Oil Prices

EUR/USD pulled back as traders focused on rising oil prices. Recent inflation data indicated that high energy prices had already started to put pressure on the European economy. In case the war in the Middle East continues for months, the euro may find itself under significant pressure.

The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. In case EUR/USD settles below the 1.1510 level, it will move towards the next support at 1.1435 – 1.1450.

GBP/USD Tests Support At 1.3215 – 1.3230

GBP/USD pulled back as traders worried about the potential duration of the war in the Middle East and reacted to Trump’s comments.

Donald Trump said that U.S. will launch more aggressive attacks on Iran in the upcoming weeks. Meanwhile, Iran continued to attack countries in the region.

Currently, GBP/USD is trying to settle below the support level at 1.3215 – 1.3230. In case this attempt is successful, GBP/USD will move towards the next support, which is located in the 1.3135 – 1.3150 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Moves Higher As Demand For Commodity-Related Currencies Declines

USD/CAD gained ground despite the strong rally in the oil markets. From a big picture point of view, traders are worried that high energy prices will deal significant damage to the global economy and put pressure on demand for commodities. Other commodity-related currencies have also moved lower in today’s trading session.

USD/CAD climbed back above the support at 1.3885 – 1.3900 and is trying to settle above the 1.3920 level. In case this attempt is successful, USD/CAD will move towards the nearest resistance level at 1.3980 – 1.3995.

On the support side, a move below the 1.3880 level will push USD/CAD towards the 50 MA at 1.3850. If USD/CAD declines below the 50 MA, it will move towards the support level at 1.3800 – 1.3815.

USD/JPY Tests The 159.50 Level

USD/JPY moved higher despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 3.80% level, while the yield of 10-year Treasuries pulled back towards 4.30%.

Traders ignore falling Treasury yields and focus on the strong rally in the oil markets, which will put significant pressure on the Japanese economy.

If USD/JPY stays above the 50 MA at 159.22, it will head towards the 160.00 level. A move above the 160.00 level will push USD/JPY towards the resistance at 161.50 – 162.00.

In case USD/JPY declines below the 50 MA, it will move towards the support level at 158.00 – 158.50.

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